Insurers retreat from a warming world's riskiest places

As climate-driven disasters mount and losses soar, insurers are increasingly retreating from the riskiest places, raising premiums sharply or pulling out of markets altogether, in a trend that is making insurance unaffordable or unavailable for many and exposing a growing financial fault line of the climate crisis.

In regions repeatedly battered by wildfires, floods and hurricanes, some major insurers have stopped writing new policies, declined to renew existing ones, or dramatically increased prices, concluding that the escalating risks can no longer be profitably covered at prices customers can bear.

The retreat reflects the hard financial logic of a warming world. Insurance works by spreading risk, but as extreme weather events become more frequent and more destructive, the losses are rising faster than traditional models anticipated, straining the industry and forcing a reckoning.

The consequences ripple widely. Homeowners in high-risk areas face soaring costs or find themselves unable to obtain coverage, which can in turn threaten property values and the ability to secure mortgages, with the potential to destabilise housing markets in exposed regions.

Some governments have stepped in as insurers of last resort, but such schemes carry their own strains and risks. The crisis has prompted difficult questions about where and how people can safely live, and about who bears the costs of climate risk.

The insurance squeeze has emerged as one of the most tangible economic manifestations of climate change, translating the abstract dangers of a warming planet into rising bills, lost coverage and hard choices for millions, and signalling how the mounting costs of disasters are beginning to reshape the economy.