Traditional insurance models are under
pressure.
Climate change is intensifying the frequency and severity of storms, floods, and droughts—exposing companies worldwide, across all industries, to physical risks.
In Europe,
0
of damage caused by extreme weather events is currently insured and this gap is
growing
Businesses are exposed to escalating physical risks—and climate change is threatening the insurance availability for these risks.
Critical infrastructure sectors face heightened exposure
Click on a sector to see the threats and what can be done about them
Threat
Convective storms that damage transmission lines or substations.
Policies generally cover asset/property damage, power outages and liability impacts but with limitations.
Strengthen infrastructure, use advanced forecasting technologies and implement robust organisational strategies.
Insurance
Possible adaptations
Flooding puts continuous operation and infrastructure integrity at risk.
Specialised policies offer protection against property damage and loss of income.
Implement robust flood barriers and levees, modernise outdated infrastructure and also consider using nature-based solutions.
Droughts leads to low water levels that threaten inland shipping operations.
Traditional asset coverage (hull and P&I) is critical, and more business interruption insurance solutions are needed.
Overhaul infrastructure, take collaborative efforts to enhance resilience.
The selection of locations and the securing of facilities in vulnerable areas are becoming increasingly important. Underwriters are tightening terms for facilities in vulnerable areas.
Flooding poses significant risks to data centre functionality and continuity.
Adapt operating sites, develop effective flood strategies to enable operational reliability.
Help is at hand
Insurers can...
Shift from being passive risk carriers to active enablers
of resilience.
Apply impact underwriting to incentivise policyholder adaptation.
Expand risk consulting services.
Invest in adaptation projects that benefit society, ecosystems and vulnerable sectors.
Develop innovative products (e.g., parametric insurance).
Companies can...
Modernise infrastructure and build organisational resilience to reduce your risk profile and maintain insurance coverage.
Conduct scenario-based climate risk assessments.
Reassess current corporate risk management and insurance strategies.
Engage with insurers to align risk mitigation measures that can improve coverage terms.
How can insurers help?
What can companies do
to insure their assets?
Work on adaptation in a coordinated manner, for example through a framework that allows for transparent monitoring and evaluation.
Pursue collaborative adaptation strategies with external partners including public authorities.
Set standards for adaptation progress, for example by rewarding policymakers who build resilience.
Develop awareness-raising tools to highlight current and future risks.
Click on a file tab to see what companies and insurers can do
Energy supply
Water supply and sewage systems
Data processing and hosting
Inland waterway and transport
Sectors at risk
Threat
Insurance
Possible adaptations
Threat
Insurance
Possible adaptations
Threat
Insurance
Possible adaptations
%
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Source: PwC, Future Insurance Availability for Businesses: Sector-Specific Perspectives in the Context of Climate Change, 2025