Global execs overlook growing catastrophe risk

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Outperform through resilience: Beazley unveils tools to help clients navigate rising climate litigation

NATURAL DISASTERS are becoming increasingly more common, with climate-related incidents costing the US economy a staggering $2.915 trillion from 1980 to 2024. From the Palisades wildfires to Hurricane Helene to the San Francisco earthquakes, the US has suffered through a slew of costly – and deadly – disasters of late. For businesses, it’s a case of ensuring they have the right insurance coverage for any potential incidents – and never leaving anything to chance. Because when disaster strikes, hindsight can be a cruel critic. “No longer classed as black swans, extreme weather events are fast becoming the norm, and global businesses are increasingly facing the associated risks, including environmental damage, commodity shortages, supply chain and business interruption,” explained Paul Bantick, group CUO at Beazley. “Yet, despite the harsh realities of climate risk, according to our risk & resilience research, only 20 percent of global executives ranked climate and the associated nat-cat risks as a top business concern.”

Beazley is a global specialty insurer that harnesses the power of expertise and employs a forward-looking view of risk to support its clients as they navigate an increasingly complex world. With an international footprint, Beazley does business where you do business, viewing every risk as an opportunity to do things differently. By developing long-term partnerships and constantly building on its deep knowledge of the environment and challenges its clients operate in and face, Beazley is ultimately helping businesses outperform and thrive.

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“The time to invest in resilience is now, and insurance has a vital role to play in supporting clients to prepare and shore up their defences and gain a clearer picture of their risk exposure”

Paul Bantick, Beazley

Organizations ‘not prepared’ for environmental damage

Published July 14, 2025

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“Our clients are grappling with the dramatic effects of climate change at home and abroad… But we believe that in this era of accelerating climate risk, we can use the power of our expertise to support clients to outperform”

Paul Bantick, Beazley

Instead, 73 percent of business leaders said that ongoing economic uncertainty is diverting their attention away from their sustainability goals by making it less of a priority, painting a worrying picture of global businesses being exposed and unprepared. “But the time to invest in resilience is now, and insurance has a vital role to play in supporting clients to prepare and shore up their defences and gain a clearer picture of their risk exposure,” added Bantick. “By developing a forward-looking view of risk and providing businesses with location-level insight into how natural hazards will evolve, we are allowing clients to identify where they could be most exposed to the future effects of climate change.”

Here, it’s essential that insurers work closely with clients to ensure they understand the breadth of the risk and that their environmental liability insurance policies are up to par with the evolving risks. “With access to real-time data and insights collected from notifications and claims, the insurance industry is also uniquely positioned to understand risk, the level of exposure, and the possible outcomes like no other,” explained Bantick. “And through collaborating across classes of business, sharing data and insights, underwriters are enabled to gain a clear understanding of the risk and build solutions that encompass the accelerating and often-hidden climate risks businesses are facing.”

‘The power of our expertise to support clients to outperform’

Here, Bantick sees insurance as pivotal in nudging companies toward long-term climate adaptation, particularly when clients are under intense pressure. “Our clients are grappling with the dramatic effects of climate change at home and abroad. Environmental risk and liabilities are growing and demand for energy is rising. But we believe that in this era of accelerating climate risk, we can use the power of our expertise to support clients to outperform. “And our research shows that businesses are struggling. 67 percent of global business leaders told us that they will find it hard to transition, making it all the more vital that we step up and actively support them on their transition journey, by being a force for enabling change and shouldering the risk as they invest in resilience.”

New risks, new technologies

And with climate volatility on the rise, Beazley continues to develop innovative solutions. One example here is Beazley’s parametric tornado insurance, something that can’t go amiss in today’s landscape. According to data from the Office for Coastal Management, of all weather-related disasters in the US, hurricanes have caused the most destruction and death – with Hurricane Helene alone incurring costs of $78.7 billion. “Our parametric tornado insurance product ensures claims are paid promptly based on the occurrence of an event rather than the actual loss incurred,” Bantick explained. “The product serves as a lifeline for those facing the upheaval caused by tornadoes, as they grow in intensity and unexpected frequency, embodying the true spirit of disaster resilience and recovery.”

This approach accelerates recovery while also acknowledging the growing unpredictability of traditional models – and supporting innovation is also part of the equation. New technologies, particularly those aimed at reducing emissions, are gaining traction but require significant investment and confidence – with Beazley leading the charge here. “As the climate risk rises, we’re seeing new technologies being developed to tackle the many challenges,” said Bantick. “For example, carbon capture and storage facilities designed to prevent the release of carbon dioxide into the atmosphere are coming to the fore. Such innovation takes investment, and through insurance we are supporting such projects and enabling investor confidence in carbon capture technologies.”

Another mounting challenge for businesses is navigating global regulation. Currently, global businesses are facing a patchwork of climate regulation, increasing the litigation risk as regulations diverge, intensify, and grow in complexity. So much so that one-fifth of global business leaders surveyed now include ESG risk and regulatory compliance failures on their risk agenda. “Getting it wrong can lead to large fines, reputational damage, and loss of investor confidence,” Bantick warned. To help clients stay ahead, Beazley has developed advanced tools. “One way is through climate litigation heatmaps – a dynamic tool designed to help our underwriters understand the global climate litigation landscape.” But heatmaps are more than visuals; they’re decision tools too. “By identifying key risk ‘hotspots’ across countries and sectors, drawing insights from an extensive analysis of emerging regulations, disclosure requirements, and active or completed litigation cases, we have a clearer insight into the risk landscape,” added Bantick. “Our underwriters are able to use the heatmap to understand the key regulations and legal precedents that our clients need to be informed of in order to manage their own exposure to climate litigation risk. By sharing these data-empowered, tailored insights, we are able to support our clients to confidently invest in and grow their global presence and outperform in the long term. “Consistent insurance coverage across all regions is also crucial, and multinational solutions can support businesses across regions, with global expertise and local partners providing detailed insight into the global landscape.” Because in the era of accelerating climate instability, resilience is not optional – and neither is the evolution of insurance to match it.

Executive concerns around climate-related risk

of US executives are concerned about climate risk

21%

of US executives are worried about environmental damage

20%

of US executives are worried about energy transition

19%

of US executives are worried about greenhouse gas emission

17%

Source: Beazley’s Risk & Resilience report

Economic uncertainty impacts sustainability goals

of global executives surveyed agree economic uncertainty is diverting their attention away from their sustainability goals by making them less of a priority

73%

are finding it hard to transition to non-carbon energy and meet net zero targets

67%

(up from 18% in 2024) of global executives rank climate risk and associated catastrophic risk as a top concern

20%

Source: Beazley’s Risk & Resilience report

The mistake many businesses make here is underestimating their climate exposure – especially in regard to risk. “The reach of climate risk is expanding into areas many businesses haven’t yet considered – environmental liability being one,” said Bantick. “When Storm Uri hit Texas in 2021, it led to pipes freezing and bursting – unfortunately, water was not the only substance being carried. As the energy production state, these pipes were also transporting thousands of gallons of crude oil, causing harmful chemicals and pollutants to damage the natural environment. Climate-related disasters such as these are becoming more frequent and the environmental and reputational damage caused by intensifying natural catastrophes more severe.”

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