"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 State Farm, Allstate and Chubb have withdrawn from writing new homeowner business in California.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.
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 broader repricing of climate risk across global insurance markets. Global insured natural catastrophe losses reached $107 billion in 2025 against total economic losses of $220 billion, with 92 percent of the insured total coming from wildfires, severe convective storms and floods. Balz Grollimund, who heads catastrophe perils at Swiss Re, observed that “the upward trend in insured losses is structural” and modeled a peak-loss scenario for 2026 exceeding $320 billion. The conditions are no longer a deviation from the baseline. They are the baseline.
Carine Smith Ihenacho, NBIM’s governance and compliance officer, told the fund’s Climate Investment Summit in October 2025 that the global economy is currently undergoing one of the largest capital reallocations in history. The Yale Law Journal, in a December 2025 essay titled “The Uninsurable Future,” framed the same shift in legal terms: the property insurance system that anchors the American mortgage market is exiting climate-exposed assets faster than the regulatory architecture can replace it.
The market that wrote the prior baseline has stopped underwriting it."
Climate Risk Is Rewriting the Logic of Global Insurance
Did I mention that Trump has made cuts in disaster funding? If no one will sell you insurance, what the F do you do? Living here in Maine, we don't have big earthquakes, hurricanes always dissipate before they get here, we had a massive forest fire a hundred years ago. But that took a combination of a drought and a very hot summer. We seem to be having cool summers these days, which brings up a minor irony. I live on a hill in cool breezy yard. Not great for growing tomatoes. But scientists are saying that big glacier in Antarctica is going to let go this decade. That will likely set off a massive tidal wave. I'm several miles from the coast, and up on a hill. Wonder if the waves will be high enough to hit my house, guess we'll see.
As I said a generation ago, this is just warming up.
Gonna get a lot worse.
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 broader repricing of climate risk across global insurance markets. Global insured natural catastrophe losses reached $107 billion in 2025 against total economic losses of $220 billion, with 92 percent of the insured total coming from wildfires, severe convective storms and floods. Balz Grollimund, who heads catastrophe perils at Swiss Re, observed that “the upward trend in insured losses is structural” and modeled a peak-loss scenario for 2026 exceeding $320 billion. The conditions are no longer a deviation from the baseline. They are the baseline.
Carine Smith Ihenacho, NBIM’s governance and compliance officer, told the fund’s Climate Investment Summit in October 2025 that the global economy is currently undergoing one of the largest capital reallocations in history. The Yale Law Journal, in a December 2025 essay titled “The Uninsurable Future,” framed the same shift in legal terms: the property insurance system that anchors the American mortgage market is exiting climate-exposed assets faster than the regulatory architecture can replace it.
The market that wrote the prior baseline has stopped underwriting it."
Climate Risk Is Rewriting the Logic of Global Insurance
Did I mention that Trump has made cuts in disaster funding? If no one will sell you insurance, what the F do you do? Living here in Maine, we don't have big earthquakes, hurricanes always dissipate before they get here, we had a massive forest fire a hundred years ago. But that took a combination of a drought and a very hot summer. We seem to be having cool summers these days, which brings up a minor irony. I live on a hill in cool breezy yard. Not great for growing tomatoes. But scientists are saying that big glacier in Antarctica is going to let go this decade. That will likely set off a massive tidal wave. I'm several miles from the coast, and up on a hill. Wonder if the waves will be high enough to hit my house, guess we'll see.
As I said a generation ago, this is just warming up.
Gonna get a lot worse.
