The Global Asia Insurance Partnership (GAIP) has released a comprehensive three-part research series highlighting the urgent need for the insurance industry to adapt to the escalating impacts of climate change. With global insured losses from natural catastrophes reaching US$107b in 2025, GAIP warns that the industry is nearing an “insurability tipping point,” where coverage could become unaffordable or unavailable.
GAIP’s research identifies three critical priorities for insurers, regulators, and governments to maintain viable insurance coverage: reinforcing risk intelligence, redesigning protection, and realigning investment. Min Hung Cheng, CEO of GAIP, emphasised the necessity of forward-looking risk management and climate-aligned investments to preserve insurability. “The actions taken today will help determine whether insurance remains an effective safety net for people, businesses, and economies,” Cheng stated.
The research delves into the dual challenges posed by climate change: physical risks from environmental impacts and transition risks from the shift to a low-carbon economy. GAIP suggests moving beyond traditional risk models to incorporate forward-looking elements and expanded climate data infrastructure. Additionally, adaptive protection design and investment alignment are crucial to address new risks and ensure market viability.
GAIP’s findings underscore the broader economic and societal implications of climate change, as disruptions extend beyond initial disasters to affect supply chains, public health, and business continuity. The organisation calls for deeper public-private collaboration to tackle these intertwined challenges effectively.
