The global economy depends on effective risk management by consumers, businesses and governments, which has helped make insurance the world’s largest industry. Insurance companies generate $3.4 trillion in premium revenue, plus another $1 trillion in investment income. Still, this vast accumulation of wealth – larger than the GDP of every nation except the US, China and Japan– may not be enough to hedge against the risks of climate change.

In 2007, the sustainability-focused investors coalition Ceres released From Risk to Opportunity: How Insurers Can Proactively and Profitably Manage Climate Change. The report explained that climate change could lead to losses for every sector of the industry:

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