Degrading ecosystems are increasing climate-related risks and coupled with nature loss and climate change are contributing to rising uninsured losses across advanced economies according to a new report.
The 80-page report, “Tackling the Insurance Protection Gap: leveraging climate and nature to increase resilience”, published by World Wide Fund for Nature (WWF) in January 2026, examines the link between climate change and nature loss and the global insurance protection gap, setting out policy solutions to strengthen resilience and ensure societies remain insurable.
The report analyses the insurability challenge beyond property insurance, demonstrating how climate and nature risks are also driving losses across health, agriculture, liability, business interruption and infrastructure – increasing health costs, reducing productivity, raising food prices and leaving supply-chain disruptions uninsured.
The WWF report reveals that climate and nature crises are rapidly undermining the foundations of the insurance system. Extreme weather events are becoming more frequent and severe. Degraded ecosystems are less able to mitigate their impacts – for example, the risk of a large-scale flooding event can increase by as much as 700% in areas of widespread deforestation.
This results in growing economic losses. Globally, the UN Office for Disaster Risk Reduction estimated the costs of disasters in 2023 at around $2.3tn (about 2% of global GDP), when indirect costs and ecosystem costs are accounted for.
The report says, “As losses caused by extreme weather events and chronic hazards like sea-level rise mount, the gap between total economic losses and the amount of those losses covered by insurance – what we term the climate insurance protection gap – is growing. This is leaving more people and businesses exposed to increasing risks. Conservative estimates of this protection gap averaged $64bn per year (over 2021-2024) in the US and €59bn per year (over 2021-2023) in the EU.
WWF Director General Kirsten Schuijt said, “The exponentially growing losses and damage from extreme weather events that are undermining the insurance market are caused both by increasing temperature and the destruction of ecosystems that are protecting us. Forests, mangroves or wetlands are crucial for reducing the devastating impact of these extreme events and therefore need to be at the heart of the strategies to increase our resilience and keep regions insurable.”
Source: Asia Insurance Review.
