Original text here from Patrice Bernard (LinkedIn)
A few years ago, Munich Re issued a warning about the looming danger of a world becoming uninsurable due to climate change. Now, a member of Allianz’s executive board, Günther Thallinger, has added his voice—painting an even darker picture for the broader financial system… and beyond.
Since 2019, our understanding of the planet’s trajectory hasn’t fundamentally changed, but awareness within the industry has grown significantly, sometimes in ways that are painfully tangible for customers. What was once just a theoretical concern—the inability to insure risks that have become too likely—has now become a lived reality for many Americans, especially in California and Florida, where multiple insurers have pulled out due to mounting losses from storms and wildfires.
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Thallinger’s outlook is especially grim. First, the long-assumed fallback solution of government intervention—where states would step in to cover natural disasters once insurers retreat—now seems unrealistic. There is, after all, a limit to how much public money can be committed, and the rising frequency and severity of climate events suggest that this ceiling may soon be breached.
And it’s not just about residential homes. Critical infrastructure and equipment are also at risk: industrial sites, transport systems, utilities, farms, and more. These assets typically operate on long modernization cycles, making them slow to adapt to new climate realities. The cumulative costs of damage in these areas are staggering—and potentially unbearable.
There’s another layer to the problem: what happens to the broader economy when assets become uninsurable? Lenders are unlikely to finance private or commercial property that can’t be covered by insurance. As a result, entire sectors or regions could be cut off from credit, leading to sharp price corrections and, ultimately, a major crisis. Thallinger sees the beginnings of a systemic risk to capitalism itself.
He also dismisses the idea that humanity will simply adapt to rising temperatures. Once climate conditions reach extreme thresholds, adaptation becomes impossible, he argues. Instead, he puts his faith in the tools we already have to cut greenhouse gas emissions—renewable energy, electrification, and more. But he also admits that these solutions need to be deployed much faster and on a much larger scale. The question is: is that even realistic, given how close we already are to irreversible tipping points?
