Allianz Spells It Out: Climate Collapse Will Destroy Insurance Industry, After Which Finance & Capitalism Will Collapse

[hatrack]

The climate crisis is on track to destroy capitalism, a top insurer has warned, with the vast cost of extreme weather impacts leaving the financial sector unable to operate. The world is fast approaching temperature levels where insurers will no longer be able to offer cover for many climate risks, said Günther Thallinger, on the board of Allianz SE, one of the world’s biggest insurance companies. He said that without insurance, which is already being pulled in some places, many other financial services become unviable, from mortgages to investments.

Global carbon emissions are still rising and current policies will result in a rise in global temperature between 2.2C and 3.4C above pre-industrial levels. The damage at 3C will be so great that governments will be unable to provide financial bailouts and it will be impossible to adapt to many climate impacts, said Thallinger, who is also the chair of the German company’s investment board and was previously CEO of Allianz Investment Management.

EDIT

The argument set out by Thallinger in a LinkedIn post begins with the increasingly severe damage being caused by the climate crisis: “Heat and water destroy capital. Flooded homes lose value. Overheated cities become uninhabitable. Entire asset classes are degrading in real time.” “We are fast approaching temperature levels – 1.5C, 2C, 3C – where insurers will no longer be able to offer coverage for many of these risks,” he said. “The math breaks down: the premiums required exceed what people or companies can pay. This is already happening. Entire regions are becoming uninsurable.” He cited companies ending home insurance in California due to wildfires.

Thallinger said it was a systemic risk “threatening the very foundation of the financial sector”, because a lack of insurance means other financial services become unavailable: “This is a climate-induced credit crunch.” “This applies not only to housing, but to infrastructure, transportation, agriculture, and industry,” he said. “The economic value of entire regions – coastal, arid, wildfire-prone – will begin to vanish from financial ledgers. Markets will reprice, rapidly and brutally. This is what a climate-driven market failure looks like.”

EDIT

https://www.theguardian.com/environment/2025/apr/03/climate-crisis-on-track-to-destroy-capitalism-warns-allianz-insurer

[cachukis]

1. Insurance companies cannot lose money and function.

[hatrack]

3. Even more to the point, reinsurance companies (like Allianz) cannot lose money and function . . . .

Imagine Swiss Re or Munich Re going tits-up - it would make Black Thursday look like a fart in a phone booth.

[cachukis]

4. Persactly.

Saw this coming years ago and downsized at peak of real estate market. People finding out now are SOL.
We are in predicament.

[bucolic_frolic]

2. Most memorable post in years

And all of it rings true. As things become uninsurable the costs of the remaining pool are passed on to those still able to find insurance, but the cost of insurance rises for them too.

Diversify. Spread risk. Realize you may have to self-insure - meaning go naked, without insurance - or write-off what you own.

Start a serious emergency fund. Repair or replacement may be on you.

The entire world is built on insurance, from the time of Lloyd's of London's founding. The Pilgrims were possible because investors put up the money and a limited liability company undertook the project after the underwriting. The investors couldn't be sued, they bought insurance.

Have serious discussions with extended family. One or the other branch may be subject to requests for temporary housing or cohabitation.

[genxlib]

5. While the Politicians fight with the Climate Scientists...

The actuarial guys are the one to watch.

They are stone cold analyzers of data and statistics with financial implications. They don't care about the politics.

When they ring the alarm bells people should listen.

They won't. They will just wonder why they can't get a mortgage or insurance and somehow blame the Democrats.

[FalloutShelter]

6. Al Gore laid some of this out in

An Inconvenient Truth.

He could have been President and something solid might have been done about Climate collapse.

BUT… he wasn’t perfect enough for the purity police and many on the left stayed home of wanted a third party candidate. I know, because I tried to sway many friends at the time.

This is the problem.

Some Democrats, and I say this as a lifelong Democrat who has been involved for 50 years, are never satisfied.There is a faction that ALWAYS wants something else. No one is ever good enough for them. We have to support our candidates, and stop eating our own.

JMHO… drag away.

[al bupp]

7. Capitalism brings down itself, just as predicted

[NNadir]

8. Since we are doing nothing at all about extreme global heating...

...where "something" would involve risk analysis and acting on the results, say, comparing the collapse of the planetary atmosphere with, say for example, Chernobyl, the insurance industry will not survive.

Of course one of the fun things practiced by antinukes is whining about the Price Anderson act, related to insurance on nuclear plants.

Apparently it has proved impossible to insure the planetary atmosphere against fossil fuel damage from normal operations.

Oh well, then...

[lark]

9. It's also happening in FL. Insurance is getting more scarce and expensive every year, almost unaffordable NOW.