Insurance and resilience are at a crossroads

Several related issues are converging to draw attention to the role of insurance in resilience, including:

• Rising risk: Extreme weather events are increasingly frequent, severe, and widespread. Insured and uninsured losses are both trending upward, with 192 billion-dollar weather-related events in the United States in the past decade costing more than $1.5 trillion. Other factors, including geopolitics, demographics, technology advances, outdated building codes, and aging infrastructure, are also reshaping risk landscapes.
• Affordability: Insurance affordability is being threatened as rising insurance premiums coincide with inflation and higher energy and housing costs. This indicates both the need for resilience actions to reduce risk and improve affordability in the long run, and the challenge of supporting resilience if it will increase costs and premiums in the short run due to more accurate risk pricing.
• Protection gaps: As of 2025, half of global catastrophe risk remains uninsured, with a global protection gap exceeding $133 billion. While the protection gap in the United States is lower than the global average, it still signals not only lost revenue and market share for insurers, but also that risk is not being fully absorbed by the combined public and private financial system. Although there are many reasons for this gap, it indicates that there are limits to insurance as a tool to manage and mitigate impacts from physical climate risk.
• Adaptation and resilience: There is a growing awareness of the need to adapt economies, communities, and homes to ongoing and future climate change. Building resilience to shocks is a critical element of this adaptation and will contribute to risk reduction and future avoided losses. However, there is an estimated $350 billion financing gap for adaptation and resilience, and the longer deployment is delayed, the higher economic and social losses will be.

RMI has a long history of working on resilience solutions across the energy sector and built environment in the United States and globally. The clean energy transition will both contribute to a more resilient energy system and economy and benefit from investments in asset hardening and community resilience.  This homepage features RMI’s work on these topics, including whitepapers, articles, case studies, and media features.