Access to insurance not yet driving climate adaptation investments: Marsh

In a landscape of increasing extreme weather events, only 5% of private sector organisations view “access to insurance” as their primary motivation for investing in climate adaptation, compared to 53% who prioritise the “need to manage risk,” according to a recent survey by Marsh.

Marsh’s 2025 Climate Adaptation Survey analysed responses from over 130 risk managers globally. It found that 78% of organisations face climate-related impacts such as flooding, heat, and water stress, with 74% reporting asset losses and disruption. Yet only 38% conduct detailed climate risk assessments, while 22% do not assess future climate impacts at all.

Regional differences in climate impacts over the past three years were evident, with the highest proportions of respondents affected by extreme weather events in Asia (73%), India, the Middle East, and Africa (68%), and Canada (67%).

The survey also found that 40% of respondents feel their organisation lacks sufficient funding for effective climate adaptation, citing challenges such as other business priorities overshadowing climate initiatives, limited knowledge of future climate scenarios, and competing interests for limited resources.

Motivation for climate adaptation is largely driven by internal and stakeholder pressures rather than insurance considerations.

Around 75% of respondents expressed limited or no concern about the unavailability or unaffordability of insurance. Only 5% identified access to insurance as their main motivation for investing in climate resilience, and just 10% do not perceive a significant demand for adaptation from their insurers.

By contrast, the need to manage risk is the most referenced driver (53%). Beyond this, organisations are motivated by the imperative to safeguard operations, reputation, and compliance, with competitive advantage (17%) and regulatory pressures (13%) cited as drivers for greater investment in climate adaptation.

Marsh noted that aligning insurance solutions with these broader motivations can enhance risk transfer mechanisms and support organisations in achieving their resilience objectives.

Amy Barnes, Head of Climate and Sustainability Strategy and Global Head of Energy & Power at Marsh, said, “Our research shows organizations consistently underinvest in climate adaptation relative to the severity of their identified risks. There is clearly an urgent need for organizations to adopt a holistic approach to climate risk, integrating asset-level and system-level assessments, and embedding climate adaptation into enterprise risk management frameworks. As climate hazards continue to intensify, proactive resilience planning is essential to safeguard assets, maintain revenue streams, and protect long-term business viability.”