Insider Report Warns European Insurers Are Retreating From Climate Risk, Leaving Homeowners and Governments to Pay

A new report from an insurance industry forum says that the retreat of insurers from weather and climate risks in the UK and Europe has already started and is likely to speed up. The findings, first reported by Bloomberg and republished by Insurance Journal on October 14, 2026, rest on information from about two dozen senior insurance professionals who contributed on condition of anonymity. The report is not a statistical study, and it does not name any European insurer as withdrawing cover. It is best understood as a warning from people inside the industry, which makes it worth reading carefully and with caution.

The report comes from Inside Track, a UK-based nonprofit founded in early 2025 as a forum for industry insiders to share accounts anonymously. According to the article, which was written by Olivia Rudgard and Gautam Naik, Inside Track says it validates its findings through its own research. Some of the contributors were interviewed by Bloomberg. The report also includes a commentary by Lord Nicholas Stern, chair of the Grantham Research Institute at the London School of Economics.

What does it claim? The central finding is that insurers are withdrawing cover for climate-driven risks and moving the losses on to governments and homeowners. The report says some of this retreat has already begun and will now accelerate, increasing uninsured losses that someone else must pay for. It also raises the concern that climate risks are being mispriced. Stern argues that insurers' models have underestimated the danger. A former senior executive at Howden Group Holdings, Anthony Hobley, argues that insurers' pricing expertise is applied mainly to one-year policies, which he says does not help clients manage long-term risk or stay insurable.

Several named executives have spoken in similar terms. Amanda Blanc, the chief executive of Aviva, said in September 2026 that homes being built in the UK today already face uninsurability because of rising flood risk. Günther Thallinger, a board member of Allianz SE, has said that entire regions could become uninsurable because of climate change. These are warnings about the future rather than announcements of specific withdrawals, and the article does not link them to a particular decision by their companies.

The report adds figures on the size of the gap between losses and insurance. Citing the European Insurance and Occupational Pensions Authority, known as EIOPA, the article says only about a quarter of natural catastrophe losses in Europe are currently covered by insurance. In the United States, the article notes, property insurers have scaled back or cancelled policies for wildfire losses in California and hurricane risk in Florida and Louisiana. It also mentions that the Bank of England noted in 2025 that insurers are not always consistent in how they value assets and liabilities when they include climate-related risk. The article gives no further amounts in pounds or euros.

How did the industry respond? The Association of British Insurers said that the industry invests significantly in understanding risk, and that building resilience requires action from government, industry and society as a whole. It also said insurers are subject to robust regulation. Insurance Europe, the European trade body, had not responded in time for publication. These responses matter because the report relies on anonymous sources, and the industry's own account is a necessary counterweight.

To understand why this matters, consider how insurance works. An insurer collects premiums from many customers and pays claims for those who suffer losses. For that to work, the insurer must be able to estimate how likely losses are and price accordingly. When weather becomes more severe and less predictable, the estimates become harder. The insurer can raise premiums, add excesses, narrow what is covered, or decline to cover some properties at all. Each of these protects the insurer, but each also reduces the protection customers receive. Over time, if premiums rise beyond what households can pay, some will drop cover. That is the mechanism the report describes as a shift of risk to homeowners and governments.

There are mitigating factors, which are general background rather than findings of the report. In the UK, a joint government and industry reinsurance scheme called Flood Re helps households in flood-prone areas obtain affordable cover, although its published rules exclude properties built after 2009 and it is due to run until 2039. The exclusion of newer homes is the context for Blanc's remark about homes being built today. Local flood defences, building standards and planning decisions also affect whether a property remains insurable, because insurers price in the protections that exist.

What should homeowners do? Check what your policy covers and what its excesses are for flood and storm, and compare quotes from several insurers or through a broker. Ask whether any flood defences or property-level protection measures, such as flood barriers or raised electrics, can lower your premium. Do not let cover lapse because of a price rise without looking for alternatives, since going uninsured can affect your mortgage terms. Buyers should ask about flood history and check flood risk maps before purchasing.

For policymakers, the report points to difficult choices on land use, public flood defences and whether to support insurance through public schemes. Those choices will determine who carries the cost of climate losses. The report does not offer a settled answer, and readers should treat its forecasts as a view from inside the industry rather than a certainty. The next signals to watch are insurers' renewal pricing, regulators' climate stress tests and any further announcements about areas where cover becomes harder to obtain.