Risk management is at the heart of insurance. A new report outlines why insurers must prioritize sustainability as growing costs will put their business models under pressure.

The frequency of natural disasters, such as wildfires, has surged over the past two decades, with global damages from climate change potentially reaching USD 38 trillion annually in the future. This is exacerbated by low insurance coverage and a lack of sustainability, which creates a vicious cycle: insufficient insurance penetration leads to protection gaps, hindering progress on sustainable development goals (SDGs). These gaps, in turn, contribute to more frequent and severe climate events, causing economic and social harm, which undermines both insurance profitability and resilience to future crises.

Insuring the future: The virtuous cycle of insurance and sustainability is a report issued by Alliance Trade. You can read it here.