Climate Risks Again Top List of Risk Manager Worries

Climate risks, disruptive technology and geopolitical instability are what worry risk managers most, according to a joint survey from the Casualty Actuarial Society and the Society of Actuaries.

The 18th Annual Emerging Risk Survey is an online questionnaire prompting risk managers to rank current and emerging risks. It uses four categories to measure risks: top current risk, the leading five emerging risks, overall emerging risk and emerging risk combinations.

Climate change has been on top of the emerging risk lists since 2021. In the latest survey, which was conducted in November 2024, it shares the top spot with geopolitical instability.

“The context of 2024 is of continued trends of severe storms and hail, heat waves and drought, a weakened but continuing respiratory infection pandemic, and geopolitical concerns within and between countries,” the report states. “AI is trumpeted to revolutionize business unless the technology facilitates a doomsday scenario.”

Respondents were asked to choose their top worries from 23 risks. The survey also presented questions about practices related to enterprise risk management, AI, staffing challenges, and other topics.

Climate change reclaimed the top spot in this survey, which is shared with worries over wars, followed by disruptive technology as the No. 3 biggest concern. Cyber/network and demographic shift rounded out the top five risks.

Global Financial Risks

A new study may draw more attention to the relevance of asset-level climate risk assessment for financial regulators.

The study published this week in the journal Nature by academics and economists, Mapping global financial risks under climate change, examines of the impact of “floods, storms, and wildfires on a universe of securities representative of global market capitalization.”

Beside a breath of research, the study also highlights findings from the Bank of England on financial stability, data from the World Meteorological Organization, Deloitte and the IPCC.

It shows direct economic losses arising from companies’ financial leverage can be amplified by climate change.

“We highlight the importance of cross-border climate financial risks, notably the transfer of impacts from production facilities in emerging economies to firms in developed economies,” the authors of the study state. “Finally, we quantify the potential increase of financial risks induced by climate change. Overall, our results emphasize the relevance of asset-level climate risk assessment for financial regulation and the importance of integrating financial impacts in the assessment of adaptation policies.”

Flood Risk

The U.K. will spend $3.31 billion (£2.65 billion) on flood defenses to protect homes from climate-fueled storms, the government announced this week.

The money will go to upgrading and repairing flood infrastructure starting as soon as March 2026 on projects like improved tidal barriers and river and sea defenses, according to a Bloomberg article on Insurance Journal.

Extreme weather is costing the U.K. economy billions of pounds per year. The Environment Agency reports 6.3 million properties in England are at risk from flooding.

According to the Bloomberg article, the government reports that roughly 66,500 properties will be better protected by the upgraded defenses.

Toby Perkins, the Labour MP who chairs the environmental audit committee, called funding was just “the tip of the iceberg,” since the outlined projects only protect a small fraction of at-risk properties.

The funding supersedes a program of investment launched by the previous government that had earmarked £5.6 billion between 2021 and 2027. Government data shows that roughly £2.1 billion was spent in the first two years of that program, Bloomberg reported.

Real Estate

The U.S. and Canadian real estate markets are on unstable ground due to increasing climate risks, necessitating “a radical re-think of common risk management strategies,” according to a Housingwire report.

The report out on Wednesday, which examines the challenges for property values and mortgage lending, cites data in a variety of reports examining the impacts of climate change on properties to make its case, including a 2024 study by a real estate expert that finds a correlation between wildfires and declining home values—it found prices in affected areas fell by 2.2% after major events.

The report also quotes experts like Eddie Seiler, executive director of the Mortgage Bankers Association Research Institute for Housing America: “If you are underwriting a 30-year loan on a property at the Outer Banks of North Carolina, which will likely be washed into the ocean in 10 years, it needs to be taken into account very explicitly […] we’re not there yet as an industry.”

Homeowners in these affected areas are struggling to meet mortgage obligations due the impacts of extreme weather and higher insurance costs.

This has led to homelessness and forced migration in some cases, the report notes.

“This occurred in areas affected by hurricanes Helene and Milton, leaving homeowners with damaged collaterals and impending defaults,” the article states. “The hurricanes also forced migration due to rising uninsurability as premium prices went up and firms exited affected zones.”

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