Allianz warns climate change is making more assets uninsurable

As a deadly heat wave claims more than 1,300 lives across Europe, one of the world's largest insurers is warning that climate change is making a growing number of assets impossible to cover.

Günther Thallinger, who sits on the management board of Allianz, said in an interview published Tuesday that "certain locations and perils cannot be covered as we would wish them to be covered," adding bluntly: "We cannot help it."insurancejournal+1

Heat, floods, storms and wildfires "could become so frequent that they challenge traditional insurance models," Thallinger said. "Risk-adequate pricing would not be affordable any longer."insurancejournal

Europe's Deadly Heat Wave Underscores the Threat

The warning arrives as Europe endures one of its most extreme heat events on record. An atmospheric "heat dome" that settled over the continent in late June has shattered temperature records across France, the United Kingdom, Germany and Spain, with readings exceeding 40°C in multiple countries. Spain alone recorded more than 1,000 heat-related deaths during the event, while the World Health Organization has attributed over 1,300 excess deaths continent-wide to the extreme temperatures since June 21.severe-weather+3

Researchers at World Weather Attribution estimate that June temperatures were between 5°C and 12°C above seasonal averages across France, Germany, Italy, Spain and southern England. Scientists have identified fossil fuel-driven climate change as the direct cause, estimating the heat wave was up to 4°C hotter than it would have been without human influence.dw+2

Banks Beginning to Follow Insurers

The insurance industry's retreat from climate-exposed assets is beginning to ripple through the broader financial system. Carsten Brzeski, global head of macro at ING Group ↗ 0.54%, said in a client note this week that heat waves represent a "new downside risk" to European economic growth, with an accumulated loss equivalent to 0.8% of GDP projected by 2029.insurancejournal

In Spain, BBVA Banco Bilbao Vizcaya Argentaria, S.A. ↗ 0.69% is now adjusting loan prices for corporate customers based on their exposure to global warming, targeting agriculture, real estate, leisure, utilities and infrastructure sectors, with retail clients next.insurancejournal

Insurers Faulted for Fueling the Crisis

A separate report published June 30 by responsible investment group ShareAction found that most of the world's 40 largest property and casualty insurers are failing to act on climate risks. Allianz and Dutch insurer Achmea were the only companies to receive a B rating — the highest awarded — while many continue to underwrite fossil fuel expansion.asiainsurancereview+1

"Insurance exists to help people recover from disasters, yet this report shows many insurers are just adding fuel to the fire," said ShareAction's Louise Marfany, noting that 73% of assessed insurers have no underwriting restrictions on upstream oil and gas expansion.asiainsurancereview

Thallinger, for his part, said the consequences of inaction are straightforward. "It's totally clear without net zero, it doesn't work," he said. Without emissions reductions, adaptation becomes "open-ended."insurancejournal