Insurance in the Polycrisis

In this Phenomenal World analysis, Kate Mackenzie and Tim Sahay examine how climate-driven disasters are destabilizing the global insurance industry and, by extension, financial and housing markets. They warn of a looming “doom loop” in which rising floods, fires, and storms render properties uninsurable, leading to unmortgageable homes, collapsing housing markets, and systemic economic strain. While governments and insurers have long relied on private insurance to distribute climate risk, the authors argue that mounting losses are outpacing the industry’s capacity, exposing the fragility of financial systems in the face of the polycrisis.