Briefing: Current risk climate must not push global warming down insurers’ risk agenda

Climate change will undoubtedly be a key topic of conversation at this week’s Biba Conference (14 and 15 May 2025) in Manchester.

Independent, non-departmental public body the Climate Change Committee told the UK government at the end of last month (April 2025) that the country is quite simply unprepared to deal with the ramifications of a more extreme, fluctuating global climate.

It said there is now “unequivocal evidence that climate change is making extreme weather in the UK more likely and more extreme”.

The group explained: “Across the UK, this looks like heatwaves, heavy rainfall and wildfire conducive conditions. The UK is not appropriately prepared for this.”

It added in its bulletin that 6.3 million properties in England are currently situated in areas at risk of flooding from rivers, the sea and surface water. This number is predicted to rise to around eight million by 2050.

Furthermore, over a third of railway and road kilometres are currently at flood risk – again, this figure is predicted to rise to around half by 2050. The Climate Change Committee added that heat related deaths already occur in the thousands each year, but this too could rise several times over to exceed 10,000 in an average year by 2050.

The public body’s estimates suggested that – unchecked – climate change could impact UK economic output by up to 7% of gross domestic product (GDP) by 2050, creating challenges for driving sustainable, long-term growth across the country.

Leaning on the private sector

The government responded by acknowledging the problems flagged in the Climate Change Committee’s data – as well as confirming that the administration could do more to mitigate climate linked challenges.

However, at present, there is simply not the funding to deliver meaningful change in this field.

One example is a Worcestershire village that has flooded seven times in the past four years. Experts stated that £30m of investment is needed to protect the village, its residents and properties. The government, meanwhile, has provided £400,000.

This creates a huge headache for the UK’s insurers and brokers.

All the evidence from groups such as the Climate Change Committee point to a significant rise in disruption due to climate events – be it floods, storms, or heatwaves.

Alongside these natural perils come claims. The issue for insurers is the balance between their role protecting clients against the unexpected and the fact that homes and businesses will suffer ever more frequent and severe damage due to natural catastrophes, which – quite simply – are anything but unexpected nowadays.

The Biba Conference has always been an event where insurers and brokers can discuss current and future issues. It is likely that insurers will need to start discussions over how the industry is to approach the impact of climate change on policyholders.

It is also likely that the UK government may look to lean on the private sector to help tackle these issues, under the premise that helping to build resilience will benefit insurers with lower claims.

Despite the myriad of current macroeconomic challenges, such as cyber and geopolitical risks, the climate threat cannot be pushed onto the back burner.