It was clear from New York Climate Week (NYCW) that the insurance industry is widely recognized as a cross-cutting enabler of climate action. In the context of resilience, the industry plays an important role in understanding and quantifying risk, pricing it accurately, promoting the adoption of solutions, and incentivizing measures that strengthen resilience against climate impacts. In the context of the energy transition, insurance can be an enabler of investment by mitigating risks associated with projects.
While this was my first experience of NYCW, colleagues who have attended in previous years confirmed that insurance has always been part of the conversation, but it was more central to the dialogue this year. However, although insurance is a key part of the solution to climate change, it cannot provide all the answers.
Rising expectations on the insurance industry
A central theme to emerge from NYCW was the growing challenges of insurability and affordability amid increasing climate-related losses. Insured losses are rising sharply, driven in part by more frequent and severe climate events, which is putting pressure on the availability and affordability of (re)insurance coverage. As the likelihood and severity of extreme weather events increases, the risk of loss — and consequently, insurance costs — also rise. While homeowners have been more affected to date, this same dynamic increasingly applies to businesses.
Wildfires in California are a case in point. Total insured losses from the California wildfire in January 2025 are estimated to cost between US$25 billion to US$39.4 billion. Meanwhile, the California FAIR Plan, the state’s insurer of last resort, had just US$377 million available to pay claims. These economics are not sustainable, emphasizing the need to focus on building resilience into homes, businesses, and communities.
Given this, participants were keen to better understand how insurance can drive solutions through risk-based pricing and incentives, how to navigate insurer climate risk disclosures, and how to demonstrate the return on investment (ROI) of adaptation measures.
Elevating resilience in business decisions
During the week, we presented key findings from the Marsh Climate Adaptation Survey 2025, revealing that 60% of respondents report having sufficient funds allocated for climate adaptation. However, a general consensus at NYCW was that organizations do not have enough resources for these efforts. A missed opportunity may include not using a cost-benefit analysis to build a compelling business case for these investments, as revealed in our survey. Many organizations still struggle to frame such adaptation spending in terms of potential avoided future costs.
Supporting this trend, industry feedback at the event emphasized the importance of including resilience-related questions in client requests for proposals (RFPs). This approach allows companies to underscore the importance of resilience to their leadership. By highlighting long-term financial risks, businesses can strengthen the economic rationale for proactive adaptation, potentially mitigating future losses.
A practical example of successful adaptation investment is New York City’s redevelopment of Brooklyn Bridge Park. This mixed-use space combines residential areas, revitalized public spaces, and resilience-building infrastructure such as elevated structures and saltmarsh grasses that protect against flood waves. Funded partly through property taxes, these flood resilience measures also contribute to lowering insurance premiums, demonstrating a practical synergy between adaptation investment and risk reduction.
Investing in nature-based solutions and quantifying their value
The third key theme from NYCW was the growing interest in nature-based solutions. Academic research shows that natural measures — such as restoring mangrove forests — can protect communities and properties from coastal flooding and storm surges.
An inspiring story shared was the US Fish and Wildlife Service’s project in New Mexico’s Carson National Forest, which draws on Indigenous knowledge to manage forests more resilient to wildfires and floods. This initiative integrates ecological restoration, cultural stewardship, and community engagement, highlighting the value of traditional practices in modern climate resilience efforts.
However, scaling nature-based solutions can be challenging. As my colleague Lovey Sidhu explained during the webinar, Harnessing Nature for Resilience, “One of the major issues is the complexity of valuing nature benefits, which are often hard to quantify and accrue over long-time horizons, making them difficult to capture on traditional balance sheets.”
Insurance can play an important role here. One way to quantify the benefits of nature-based solutions is to integrate them into catastrophe models. The reduced risk can potentially lead to lower insurance premiums and improved access to insurance for vulnerable areas.
Challenges ahead, but optimism prevails
Enhancing how monetary value is assigned to nature-based solutions is key to addressing the three major themes highlighted in New York: making insurance more affordable by demonstrating measurable risk reductions, supporting adaptation initiatives, and encouraging broader adoption of effective solutions. Together, insurance, adaptation, and nature-based solutions create a powerful, mutually reinforcing pathway toward stronger climate resilience.
