A warning has emerged that climate change is increasing the risk of natural disasters such as wildfires, floods and storms, and more areas could find it difficult to obtain insurance at all. The criticism is that insurers are avoiding risk by raising premiums, cutting coverage and exiting markets, shifting the burden onto households and local communities.

CleanTechnica reported on Oct. 14 that Inside Track, a group of senior experts in the UK and European insurance industry, published a report saying climate risk could spread beyond insurance markets and into broader economic instability.

The report grouped insurers' responses into three categories. They are sharp premium increases reflecting natural disaster risks, reduced coverage for high-risk items such as wildfires, and halting insurance supply for certain regions or industries. It said such moves have already begun and are expected to accelerate.

The problem arises if the number of homes and businesses unable to obtain insurance increases. Insurance is a key condition for mortgage loans, and a surge in uninsured property could lead to falling real estate values and instability in lending markets. The report also warned that such a shock could create risks similar to the 2008 global financial crisis.

The insurance industry's practice of short-term contracts was also cited as an issue. Anthony Hobley (앤서니 홉리), former deputy chair for climate risk and resilience at Howden Group, pointed out that most insurance contracts are signed on a one-year basis and fail to adequately reflect long-term climate risks.

In practice, British insurer Aviva warned that flood risk is making it difficult for some newly built homes to obtain insurance. Germany's Allianz SE also voiced concern that climate change could leave entire regions unable to obtain insurance.

In the United States, premium hikes and restrictions on new policies have emerged after damage from California wildfires and Florida hurricanes.

Inside Track claimed that some insurers are even pressuring catastrophe risk analysts to lower projections of future damage. It added that insurers' short-term profit-focused responses could increase long-term economic risks, and urged active action by governments and financial authorities.