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Climate Risk Is Rewriting the Logic of Global Insurance

Two announcements ten days apart, a March reinsurance report and a COP30 finance decision are retiring the operating assumption of the last forty years in real time.

In 2018, California’s insurer of last resort carried roughly 127,000 policyholders. By the end of 2025, it carried more than 668,000, with residential exposure approaching $603 billion in June 2025, a 424 percent increase since 2020. The Palisades and Eaton fires in January 2025 resulted in an estimated $40 billion in insured losses and forced the FAIR Plan to issue a $1 billion assessment to member insurers, the first such call since the 1994 Northridge earthquake. State Farm, Allstate and Chubb have withdrawn from writing new homeowner business in California. According to the UCLA Luskin California Poll published in January 2026, more than one in five California homeowners have dropped their home insurance because their policies were canceled or premiums had become unaffordable. The withdrawal is no longer cyclical. It is structural.

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Similar retrenchment pressures are emerging in Florida and Louisiana, where escalating hurricane losses are destabilizing private insurance markets, as well as in parts of Australia and southern Europe that are confronting intensifying wildfire exposure. What is unfolding is a........

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