From safety net to resilience-builder: how the insurance industry is stepping up

In a world increasingly shaped by interconnected and compounding risks — from climate change and cyberthreats to geopolitical instability — there is a renewed imperative to strengthen international and multistakeholder cooperation to build resilient societies and economies.

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Escalating climate risks, shifting economic conditions and underinvestment in risk reduction are challenging the affordability and availability of insurance coverage particularly in the areas where it’s most needed. This evolving landscape is raising important questions about how to maintain insurability, close protection gaps and unlock investment for more adaptive, risk-aware societies.

In 2024 alone, extreme weather events caused $320 billion in damages — yet less than half of those losses were insured. The crisis is twofold: a persistent protection gap in the Global South, and a retreat of insurance coverage in the Global North. As affordability and availability shrink, so too does society’s collective ability to manage risk.

This is not just a challenge for insurers — it is a systemic threat to global resilience, development and inclusive growth. If left unaddressed, it will destabilise markets, deepen inequality and derail progress toward climate and development goals.

So what needs to change?

That question animated discussions at the Insurance Development Forum’s (IDF) recent 10th anniversary convening; where industry leaders, policymakers and development institutions came together not to celebrate, but to confront the stakes and chart a new path forward. What emerged was a compelling call to redefine the future role of insurance in a rapidly changing world, centred on three urgent priorities:

1. Strengthening and preserving insurability in a warming world

As mentioned above, extreme weather events caused $320 billion in economic losses in 2024 — yet only $140 billion was insured. This stark gap reflects both the lack of affordable coverage in lowand middle-income countries and the accelerating withdrawal of insurance from high-risk areas in advanced economies, where insurers cite mounting losses, regulatory uncertainty and rising exposure.