Insurability and Climate Disruption: A Silent Crisis in Motion

A recent Financial Times article, titled "How the next crisis could start," highlights a disturbing trend directly impacting the economic foundations of our societies: the growing uninsurability of assets exposed to climate risks.

A Crisis Unfolding... and Expanding

In the United States, more and more homes are becoming uninsurable in certain regions due to recurring natural disasters such as wildfires, floods, and tornadoes. Major insurers like State Farm and Allstate have already stopped offering policies in states like California and Florida, which have become too risky.

But this phenomenon is not limited to North America. Warning signs are increasing in Europe as well:

• In France, homes with structural cracks due to repeated droughts are becoming uninsurable or unrebuildable.

• In Italy and Germany, devastating floods in recent years raise questions about the long-term insurability of certain zones.

• In the UK, rising sea levels are starting to affect the insurance market in coastal regions.

An Economic Domino Effect

The logic is harsh: an uninsurable property loses its economic value. For many households, this means the outright disappearance of their primary asset. The resulting vulnerability ripples outward: mortgage defaults, banking instability, and investor hesitancy.

Unlike traditional financial crises, no monetary or regulatory tool can permanently offset the physical impacts of climate change.

A Wake-Up Call from Insurers

"A 2°C World Might Be Insurable, A 4°C World Certainly Would Not Be," said Henri de Castries, the CEO and Chairman of AXA, one of the world's largest insurers, has set the bar high for institutional investors when it comes to acting on climate risks and opting for divestment. The French group has more than $1 trillion in assets under management..

Yet, we are already seeing systemic fragility at +1.5°C, highlighting how fast climate impacts can render entire sectors of the economy non-operational.

For Insurers: A Need for Measurement and Adaptation

Insurance companies are both exposed (via assets, clients, and claims) and influential (via risk assessment criteria). They need robust tools to:

• Map climate and ecosystem risks at territorial scales.

• Understand how Scope 3 and biodiversity impact insured systems' stability.

• Adjust products and pricing with a resilience-based logic.

• Communicate effectively with regulators and financial markets about their climate strategy.

DT Master Carbon's Role

DT Master Carbon develops technological solutions that integrate climate-biodiversity data into the decision-making processes of economic actors—especially insurers.

The Corporate Climate Biodiversity Platform offers precise environmental impact measurements by territory, value chain, or client exposure. It supports compliance with European standards (CSRD, Taxonomy, etc.) while providing indicators essential for insurance risk management.

Credibility Comes Through Rigor

In the face of climate disruption, transparency, data traceability, and scientific rigor are essential. Insurability is becoming a revealing marker of our capacity to embrace systemic change.

Companies that can measure, adapt, and anticipate will remain insurable. DT Master Carbon is here to help them navigate this transformation with structure, confidence, and impact.

Want to assess where your organization stands in France’s climate trajectory?

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