UK CEOs recognise that the conditions they’re operating in are changing fast, and that the future of their organisation depends on bold, forward-looking decisions. That’s according to PwC’s latest CEO Survey, which reveals that 98% of UK CEOs expect to make material changes to their business or operating model this year.
These findings stand out because they echo what we’re seeing across the insurance industry.
Climate-related risk is one of the most urgent and complex challenges we’re facing: the protection gap is widening, annual losses are rising, and pressure from regulators, customers, and investors is increasing. But there is also a window of opportunity for insurers to lead, if they’re willing to take bold, decisive action.
Meeting these challenges and making the most of the opportunities that come with the transition requires a new approach: one that reinforces commercial resilience while enabling our industry to support the new business models that move us towards a more sustainable future.
A rising tide of pressure
Climate resilience has become an unavoidable priority for insurers. Extreme weather events - wildfires, floods, storms - are accelerating in both frequency and severity, and insurers are directly impacted. Global losses from natural catastrophes reached $320 billion in 2024, yet less than half of that was insured.
As exposure increases and premiums rise to reflect the risk, more people are being priced out of cover altogether. In some regions, insurers are pulling back entirely, increasing vulnerabilities for households, businesses, and entire sectors.
Even though there have been recent simplification efforts in the EU to ease the reporting burden for companies, regulatory expectations are still intense with frameworks like the Corporate Sustainability Reporting Directive (CSRD) and evolving disclosure requirements setting the course for how organisations report, assess, and respond to climate risk. Customers, investors, and employees also want to see credible, sustained action. Younger talent, in particular, expects to see climate embedded into decision-making at every level of the organisation.
Insurers as partners and advisors for resilience
Insurance has traditionally stepped in after disaster strikes. But as climate risk intensifies, that model falls short. While most climate-related losses can’t be avoided entirely, they can often be reduced.
One of the clearest examples comes from wildfire risk in the US. Guidewire’s recent Wildfire Report, based on data from HazardHub, showed that two mitigation actions could reduce expected losses by around 20%. When a dozen or more actions were taken, potential losses dropped by over 70%.
That level of impact makes a strong case for insurers to engage earlier with customers. It might mean offering advice on resilience measures, highlighting available tools like FreeHomeRisk.com, or using renewal conversations to encourage preventative action.
Helping customers prepare, rather than just recover, will reduce claims, maintain affordability, and keep insurance viable in high-risk regions, which, in turn, helps protect individuals, businesses, and communities.
Powered by data and technology
Across industries, leaders are investing in technology to drive the critical change needed. PwC’s CEO Survey reveals that 61% of UK CEOs are investing in technologies such as AI and GenAI, cloud, data, and analytics to support their transformation.
In insurance, this shift is already unlocking new ways to manage climate risk more effectively. Tools like Guidewire HazardHub enable insurers to understand climate-related risk at the level of an individual property, rather than broad geographic zones. This insight can inform more accurate pricing, smarter underwriting, and personalised risk advice. It also helps insurers focus resources where they can have the greatest impact, whether that’s sharing information, supporting mitigation, or developing new cover options.
As hyper-localised data becomes standard across the industry, the shift from response to prevention will accelerate, reducing claims, strengthening customer relationships, and ultimately supporting the long-term sustainability of the market.
Enabling the transition
Beyond managing rising climate risks, insurers also have a role in powering the transition to a low-carbon economy.
The transition is creating new industries and business models - from battery storage and renewable energy to vertical farming and waste management - all of which need insurance to scale responsibly. Many of these new business models don’t fit easily within traditional underwriting frameworks, but they still require protection to attract investment and grow.
Insurers can also help shape consumer behaviours. Existing products can be used more strategically to encourage lower-emission choices and risk reduction, whether through incentives for electric vehicle use, car-sharing schemes, or upgrades that improve flood or fire resilience. These tools already exist. The opportunity now is to apply them more consistently and more purposefully.
PwC’s UK CEO Survey suggests that reinvention is underway. For insurers, the challenge now is to ensure climate resilience is part of that change. Few sectors are better placed to influence both risk outcomes and the pace of the climate transition. With the right data, tools, and strategy, insurers can move from reacting to risk to helping reduce it, protecting not just their balance sheets but the customers and communities they serve.