Enjoying a stable environment lets us plan for the most comfortable lifetime possible. The financial environment fluctuates, making financial planning more difficult. The political environment is actually fluctuating wildly, making planning even more difficult for global leaders who have economists and other professionals at their disposal. However, at the personal scale – such as being able to get a mortgage so we can buy a home – I do get concerned.
The insurance industry relies on reliable facts to make decisions, so they’re a more reliable source for making personal decisions. Comments afterwards.
● ● ● ● ● ● ●
Climate crisis on track to destroy
capitalism, warns top insurer
Action urgently needed to save the conditions under which markets
and civilisation itself – can operate, says senior Allianz figure
Damian Carrington Environment editor
The Guardian
3 Apr 2025
The climate crisis is on track to destroy capitalism, a top insurer has warned, with the vast cost of extreme weather impacts leaving the financial sector unable to operate.
The world is fast approaching temperature levels where insurers will no longer be able to offer cover for many climate risks, said Günther Thallinger, on the board of Allianz SE, one of the world’s biggest insurance companies. He said that without insurance, which is already being pulled in some places, many other financial services become unviable, from mortgages to investments.
Global carbon emissions are still rising and current policies will result in a rise in global temperature between 2.2C and 3.4C above pre-industrial levels. The damage at 3C will be so great that governments will be unable to provide financial bailouts and it will be impossible to adapt to many climate impacts, said Thallinger, who is also the chair of the German company’s investment board and was previously CEO of Allianz Investment Management.
The core business of the insurance industry is risk management and it has long taken the dangers of global heating very seriously. In recent reports, Aviva said extreme weather damages for the decade to 2023 hit $2tn, while GallagherRE said the figure was $400bn in 2024. Zurich said it was “essential” to hit net zero by 2050. Thallinger said …
“The good news is we already have the technologies
to switch from fossil combustion to zero-emission
energy. The only thing missing is speed and scale.
This is about saving the conditions under which
markets, finance, and civilisation itself can
continue to operate.”
Nick Robins, the chair of the Just Transition Finance Lab at the London School of Economics, said …
“This devastating analysis from a global
insurance leader sets out not just the
financial but also the civilizational
threat posed by climate change. It needs
to be the basis for renewed action, parti-
cularly in the countries of the global south.”
Janos Pasztor, former UN assistant secretary-general for climate change, said …
“The insurance sector is a canary in the
coal mine when it comes to climate impacts.”
The argument set out by Thallinger in a LinkedIn post begins with the increasingly severe damage being caused by the climate crisis: “Heat and water destroy capital. Flooded homes lose value. Overheated cities become uninhabitable. Entire asset classes are degrading in real time.” He said …
“We are fast approaching temperature levels – 1.5C, 2C, 3C
– where insurers will no longer be able to offer coverage for
many of these risks. The math breaks down: the premiums
required exceed what people or companies can pay. This is
already happening. Entire regions are becoming uninsurable.”
He cited companies ending home insurance in California due to wildfires.
Thallinger said it was a systemic risk “threatening the very foundation of the financial sector”, because a lack of insurance means other financial services become unavailable: “This is a climate-induced credit crunch.” He said …
“This applies not only to housing, but to infrastructure,
transportation, agriculture, and industry. The economic
value of entire regions – coastal, arid, wildfire-prone –
will begin to vanish from financial ledgers. Markets
will reprice, rapidly and brutally. This is what a
climate- driven market failure looks like.”
No governments will realistically be able to cover the damage when multiple high-cost events happen in rapid succession, as climate models predict, Thallinger said. Australia’s disaster recovery spending has already increased sevenfold between 2017 and 2023, he noted.
The idea that billions of people can just adapt to worsening climate impacts is a “false comfort.” He said:
“There is no way to ‘adapt’ to temp-
eratures beyond human tolerance.
Whole cities built on flood plains can-
not simply pick up and move uphill.”
At 3C of global heating, climate damage cannot be insured against, covered by governments, or adapted to. Thallinger said …
“That means no more mortgages, no new real
estate development, no long-term investment,
no financial stability. The financial sector as
we know it ceases to function. And with it,
capitalism as we know it ceases to be viable.”
The only solution was to cut fossil fuel burning, or capture the emissions, he said, with everything else being a delay or distraction. He said capitalism must solve the crisis, starting with putting its sustainability goals on the same level as financial goals.
Many financial institutions have moved away from climate action after the election of the US president, Donald Trump, who has called such action a “green scam”. Thallinger said in February …
“The cost of inaction is higher than the cost of
transformation and adaptation. If we succeed
in our transition, we will enjoy a more efficient,
competitive economy [and] a higher quality of life.”
● ● ● ● ● ● ●
The insurance industry relies on their actuarial people to determine their actions. They’re neither “tree hugger” types nor greedy wealth builders.
In the film “Shooter,” Senator Meachum, who was running illegal incursions for oil producers, said, “The truth is what I say it is.”
In the ”Jack Reacher” movie, the (villain) Zek’s response to the question about how much killing was enough was: “Enough? There is no such thing as ‘enough.’ We take what can be taken; this is what we do.”
And in John Wayne’s first film, 1939 “Stagecoach,” banker Henry Gatewood said: “I have a slogan that should be blazoned on every newspaper in this country: America for the Americans! The government must not interfere with business! Reduce taxes! Our national debt is something shocking. Over one billion dollars a year! What this country needs is a businessman for president!” (When the stagecoach reached its destination, he was arrested for bank theft.)
The films are fiction, but near reality, as when President Trump refused further fact-checked debates, or when multi-billionaires are appointed to head agencies in which they have no experience or technical competence.
In this insurance industry report, I really like one of the quoted passages …
“The good news is we already have the technologies
to switch from fossil combustion to zero-emission energy.”
And we have. Garden Atrium residents use no fossil fuels for home or e-car. Our quality-of-life experience is every bit as good. We’re not “super heroes.” But it’ll take many more of us to lead the needed change. As consumer pressure caused grocers to provide healthy organic foods, we must buy homes and cars that use no fossil fuels. It’s up to each of us.
