Sustainability and Insurance: October 2026 Roundup
29 October, 2026
Analysis
Quiet losses, rising risk: don’t mistake a benign year for a safe one
By the headline numbers, 2026 has been kind to (re)insurers so far. Swiss Re Institute estimates global insured natural catastrophe losses of USD 42bn in the first half, 16% below the 10-year average and the lowest first-half total since 2020. Gallagher Re’s estimate is similar, and it notes that the industry has now gone five consecutive quarters without a single event generating more than USD 10bn of insured losses. With El Niño conditions established and expected to strengthen, many in the market expect another round of renewals under soft conditions.
We think the industry should be careful about reading too much into this. Insured losses depend on where events strike, not just how many occur. US severe convective storm activity was above average in the first half, but the biggest outbreaks largely missed Texas, the Southern Plains and the Southeast, where storm frequency and insured values are most concentrated. Aon’s mid-year data makes the same point: Illinois recorded roughly four times its long-term average tornado activity. A quiet loss half-year is partly a matter of geography and timing, not evidence of lower hazard.
Meanwhile, the hazards themselves continue to shift. Europe, the fastest-warming continent, now experiences 64% more days above 30°C than in the 1950s. June’s record heat set the stage for an early and active wildfire season in France and Spain, and Swiss Re estimates that European insured wildfire losses have grown by 8 to 11% a year in real terms since 1970. The protection gap also remains stark: the Venezuela earthquake sequence caused around USD 20bn of economic damage, of which only a small share is expected to be insured.
The danger of a benign period is that it invites the wrong conclusions. With capacity at record levels and rates softening across property and renewables, there is pressure to relax terms, reduce deductibles and chase growth. That is rational in the short term, but it stores up problems if pricing and accumulation discipline weaken just as exposures grow. Swiss Re Institute’s latest research estimates that AI data centres and renewable energy could generate around USD 200bn of commercial premiums by 2030 but warns that these assets are clustering in the same locations and relying on shared infrastructure. Growth and concentration are arriving together.
Encouragingly, the quarter’s news also shows what a more mature response looks like. On the buyer side, Amwins reports that renewable energy owners are using soft-market premium savings to buy higher catastrophe limits rather than banking the discount. On the public policy side, both the UK and Ireland are rebuilding flood insurance around resilience. Flood Re’s reforms introduce Flood Performance Certificates so that pricing can reward property-level protection, while Insurance Ireland’s proposal rests on the principle that adaptation is what makes insurance for all possible. Parametric structures are also proving their worth: Hawaiʻi’s coral reef policy paid out for the first time after Hurricane Lala, getting funds quickly to a natural asset that protects the coastline.
For carriers, the practical implications are clear. Use the benign period to strengthen accumulation management and modelling for secondary perils such as wildfire and convective storm. Resist eroding terms where exposures are growing fastest, including large renewable and data centre assets. Invest in products and partnerships that reduce losses rather than simply transfer them, from resilience-linked pricing to parametric and nature-based solutions.
A quiet loss year should be read as an opportunity to prepare, not as a sign that the risk has passed. Carriers that use it to build resilience will be better placed when losses return to trend. Those that take it as evidence the risk was overstated may be tested at the next major event.
Natural catastrophes and climate risk
Protection gaps and resilience
- Time For a Rethink, Says Flood Re | Insurance Edge
- Tánaiste and Minister Troy announce new Flood Insurance Working Group | gov.ie
- Insurance Ireland proposes national solution to close Ireland’s flood insurance protection gap | Insurance Ireland
- Hurricane Lala triggers The Nature Conservancy’s US coral reef insurance policy for first time | Reinsurance News
Capacity for the transition
- Aon establishes Global Onshore Renewables Facility | Reinsurance News
- Amwins Global Risks broadens global renewable energy catastrophe facility and raises capacity to $50m | Reinsurance News
- McGill & Partners launches South Africa renewables insurance solution with GIB | Reinsurance News
Sizing the opportunity
Regulation and disclosure
- EIOPA consults on enhancements to insurance corporate disclosures under EU Taxonomy | EIOPA
- Insurance Europe and the CFO Forum joint response to EIOPA consultation on the EU Taxonomy Disclosure Delegated Act | Insurance Europe
Environmental liability
Deep-dive
Natural catastrophes and climate risk
Swiss Re Institute estimates that global insured natural catastrophe losses reached USD 42bn in the first half of 2026, 16% below the 10-year average and the lowest first-half total since 2020. Severe convective storms remained the largest driver at around USD 28bn, but the biggest US outbreaks largely spared the most heavily insured regions. The more important message concerns Europe. As the fastest-warming continent, it now experiences 64% more days above 30°C than in the 1950s, and June’s record heat set up an early wildfire season in France and Spain. Swiss Re estimates that European insured wildfire losses have grown by 8 to 11% a year in real terms since 1970, making wildfire the fastest-growing weather peril globally. For insurers, the takeaway is that a benign loss year reflects where events landed, not a fall in underlying risk.
Protection gaps and resilience
Time For a Rethink, Says Flood Re | Insurance Edge
Marking its tenth anniversary, Flood Re announced a package of reforms alongside Defra in July. The premium it charges insurers for contents-only policies in Council Tax Bands A and B will more than halve, from £52 to £25, from April 2027, with insurers expected to pass the savings on to customers. The changes respond to evidence that, in three of the last four years, the scheme spent more repairing homes in Bands G and H (under 4% of UK homes) than in Bands A and B (around 45%). Flood Performance Certificates, similar in principle to EPCs, will also be developed so that pricing can recognise property-level resilience. For insurers, this signals that the transition to risk-reflective pricing ahead of Flood Re’s planned exit in 2039 will depend increasingly on resilience data at individual property level.
Tánaiste and Minister Troy announce new Flood Insurance Working Group | gov.ie
In August, the Irish Government set up a Flood Insurance Protection Gap Working Group, chaired by former senior civil servant Jim Breslin, bringing together government departments, agencies and insurers to improve access to flood cover. Two weeks later, Insurance Ireland published its own proposed national framework, built on four pillars: a homeowner flood adaptation scheme supported by a Flood Performance Certificate, a Sustainable Flood Insurance Fund for risks the conventional market cannot carry, tighter controls on development in high-risk areas, and continued investment in flood defences. Its modelling of around 1.9 million homes finds that 8% of properties account for almost half of expected flood losses. Rather than waiting for government to set the terms, the industry has put forward its own solution, which places insurers as partners in designing the scheme.
The Nature Conservancy’s parametric coral reef policy in Hawaiʻi, launched with WTW in 2022 and underwritten by Munich Re, has paid out for the first time after Hurricane Lala brought sustained winds of 65 knots within the covered area. The minimum payout of USD 200,000 will be disbursed with the Hawaiʻi Emergency Reef Restoration Network, a coalition of agencies, scientists and community groups, to assess and repair damaged reefs. The sum is modest, but the payout is an important proof of concept. It shows that trigger-based cover can get funds to natural assets quickly, which matters because those assets protect coastal communities and property. The challenge for the market is to make premiums affordable enough for this kind of cover to scale.
Capacity for the transition
Aon establishes Global Onshore Renewables Facility | Reinsurance News
Aon has launched a Global Onshore Renewables Facility, offering limits of up to USD 300m per location across the construction and operational phases of onshore wind, solar PV and battery storage projects. Developed by Aon’s Global Broking Centre in London, the facility targets smaller and mid-sized projects that have historically struggled to access consistent, cost-effective capacity. Aon points to projections of record energy transition investment of USD 2.2tn in 2026. Days later, Aon also launched a Power Lifecycle Program offering up to USD 2.5bn of cover for conventional gas power projects, driven by data centre demand. Taken together, the two launches show brokers building capacity wherever energy capital is flowing, with rising power demand, and not only the transition, now driving new facilities.
Amwins Global Risks has expanded its natural catastrophe facility for renewable energy projects, raising capacity to USD 50m per placement. Originally designed to provide excess severe convective storm cover for US projects, it now covers earthquake, flood, wildfire, windstorm and other major perils worldwide, including associated transmission infrastructure. The facility sits above primary property and construction programmes, helping close the gap between primary capacity and the full value of increasingly large projects. The most interesting detail is the buyer behaviour behind it: Amwins says many project owners are using soft-market premium savings to buy higher catastrophe limits, while lenders and investors push for stronger protection on high-value assets.
McGill & Partners launches South Africa renewables insurance solution with GIB | Reinsurance News
McGill and Partners and GIB, South Africa’s largest independent broker, have launched Protea Green, a facility providing A-rated capacity across the lifecycle of renewable energy projects in South Africa. Aviva, Volt and Munich Re Specialty – Global Markets are the lead insurers, supported by a follow panel and McGill’s strategic arrangement with AIG. The partners argue the country’s growing pipeline of utility-scale projects has been underserved by the insurance market. The model, which combines London market access with local broker relationships, is a template for extending transition capacity into emerging markets, where investment needs are high and insurance penetration is often low.
Sizing the opportunity
AI and renewables to create $200bn insurance opportunity | The Actuary
New Swiss Re Institute research estimates that investment in AI data centres and renewable energy could generate around USD 200bn in cumulative commercial insurance premiums by 2030, with renewables accounting for USD 111bn and data centres USD 91bn. Global energy investment is expected to reach USD 3.4tn in 2026, around USD 2.2tn of it directed to clean energy, grids, storage and efficiency. The opportunity spans engineering, property, marine, liability, credit and surety. However, Swiss Re warns that this ’capex super-cycle’ is creating larger, more concentrated risks, as assets cluster in the same locations and rely on shared infrastructure. Capturing the growth will depend on how well carriers understand and price those accumulations.
Regulation and disclosure
EIOPA consults on enhancements to insurance corporate disclosures under EU Taxonomy | EIOPA
In July, EIOPA consulted on changes to insurers’ EU Taxonomy disclosures. Proposals include renaming the underwriting KPI the ’Adaptation Underwriting KPI’ and narrowing it to Taxonomy-eligible lines, standardising how natural catastrophe premiums are split out, and exploring a new ’Green Insured Activities KPI’ covering policies sold to Taxonomy-reporting companies and retail housing and transport. Insurance Europe and the CFO Forum pushed back, arguing the underwriting KPI is rarely used by investors and should become voluntary, and opposing any new KPI because of the extra reporting and assurance burden. The debate exposes a real tension. The industry wants simpler reporting, but it also wants recognition for its role in adaptation and the transition, and that is difficult to evidence without credible metrics.
Environmental liability
Novacore launches environmental segment as PFAS claims reshape the market | Insurance Business
US specialty insurer Novacore has launched an environmental segment, built around a re-engineered Environmental Remediation Cost Cap product and a Pollution Legal Liability product, with plans to start writing business later this year. The launch comes as two major insurers have exited site environmental liability in recent years while PFAS-related claims activity rises, leaving gaps in both capacity and coverage. For the market, this is a reminder that some of the most consequential sustainability exposures sit in casualty rather than property. Specialists that can underwrite long-tail pollution risk with discipline have an opening, but PFAS will test reserving assumptions and policy wordings for years to come.
About the author:
Harry Schlote, Senior Consultant. Harry is a Senior Consultant at Oxbow Partners with experience across technology, strategy, and transformation. He previously worked on defining the underwriting strategy for a leading London Market insurer, including an in-depth capability assessment and establishing strategic workstreams to execute on the strategy. He has also supported a large-scale transformation initiative for a global (re)insurer, outlined the (Gen)AI strategy for a top quartile Lloyd’s syndicate, and has worked on financial benchmarking for a global Bermuda-based reinsurer.
