European insurers withdraw coverage for climate-driven risks

European insurers are increasingly withdrawing coverage for climate-driven risks, a trend that is expected to accelerate. According to a report by the nonprofit Inside Track, this retreat is shifting the burden of weather-related losses onto governments and homeowners.

Industry leaders have expressed concern regarding the long-term viability of certain areas. Aviva CEO Amanda Blanc noted that new homes in the UK may already face uninsurability due to flood risks, while Allianz SE director Günther Thallinger warned that “entire regions” could become uninsurable due to climate change.

There are also allegations of systemic issues regarding risk assessment. An anonymous industry professional claims that some firms are under pressure to artificially lower loss forecasts to keep premiums affordable and remain competitive, effectively “fudging the numbers” and taking on more risk than models suggest is safe. Lord Nicholas Stern of the Grantham Research Institute added that current models may be underestimating dangers, leading to mispriced risks that could reach unmanageable levels.

The Association of British Insurers stated that while the industry invests heavily in risk assessment and is subject to robust regulation, resilience requires coordinated action from government and society rather than insurers acting alone.