Too hot to insure – avoiding the insurability tipping point

FSI Insights  |  No 54  | 
20 November 2023

Sound insurance pricing and underwriting practices are essential to manage financial risks arising from climate change. At the same time, insurers' pricing and underwriting policies can influence climate risk adaptation and risk mitigation measures. This paper examines how insurers and insurance supervisors are incorporating considerations on climate-related risks in insurance product pricing and underwriting, based primarily on a survey of selected insurance supervisors and insurers. It lays out potential policy implications including on affordability and availability of insurance coverage for climate-related risks.

JEL classification: G18, G22, G28, Q28, Q54

Keywords: climate change, insurance supervision, financial stability