Insurance is the world’s canary in a coal mine: When the professional risk mitigators identify a looming problem, everyone else takes note. And the U.S. insurance industry has deemed climate change a clear and present financial danger, according to a recent report released by Ceres, a non-profit sustainability advocacy group.

Of the 526 insurance groups participating in the study, 97 percent disclosed their climate-related strategies in 2023, an increase from the 87 percent (of 418 participating groups) surveyed a year earlier. Additionally, the percentage of insurers measuring climate-related risk increased to 76 percent from 62 percent.

The report found that this increase is likely due to many factors, including:

• A projection that the aggregate global financial toll of climate-related disasters will reach $12.5 trillion by 2050
• Weather-related disasters attributable to climate change are expected to increase by 6.5 percent annually going forward, vs. 4.9 percent between 2002-2022
• Rising temperatures causing an abrupt decrease in agricultural yields, with a negative ripple effect on supply chains and regional economics.

But while the percentage of companies disclosing their climate-related strategy reflects the industry’s broad acknowledgement of the problem and its associated risks, the particulars of those plans are often lacking.

“For the third year in a row, we’re seeing plateauing in the response rates for details regarding metrics and targets pillars,” said Jaclyn de Medicci Bruneau, director of insurance for the Ceres Accelerator for Sustainable Capital Market, “We’re still stuck just shy of 30 percent.”

This could be due to several reasons, according to Bruneau. One big one is industry hesitation to record clear and trackable targets that would allow others to hold the insurers accountable. Additionally, smaller insurers may not have the capacity or resources to meet set targets.

Bruneau noted that in August, Ceres will release a companion report that will be “a deep dive on metrics and targets.” This report, she added, will “build out best practices, using examples from carriers that did provide good responses, while also creating a resource for the industry that should help move those numbers up.”

Government’s role

Despite the industry’s general willingness to at least partly disclose climate-related strategies, states such as Cal