Emissions Gap 2025 Report Signals Risk Surge for Insurance Sector

The Emissions Gap Report 2025 from the United Nations Environment Programme paints a sobering picture of global climate trajectory a decade after the adoption of the Paris Agreement. Despite some incremental improvements, the world remains far off course from limiting warming to the Paris Agreement’s 1.5C or even 2C targets. Most nations have failed to deliver meaningful new climate pledges for 2035, and updated projections suggest global temperatures are still headed toward a rise of 2.3 to 2.5C this century based on current pledges, and up to 2.8C under current policy. For insurance claims professionals, this signals an urgent reality: intensifying climate volatility is no longer a distant forecast, but a near-certainty that will shape loss trends, claims complexity, and risk models in the coming decade.

The report notes that only about a third of countries submitted new nationally determined contributions (NDCs) by the 2025 deadline, with the United States poised to withdraw its own, erasing a measurable portion of global progress. The current pace of emissions reductions is insufficient, with a 2.3 percent increase in global greenhouse gas emissions recorded in 2024, driven notably by deforestation and land-use change. G20 nations, responsible for 77 percent of emissions, are lagging in both ambition and implementation. Even if all current pledges are met, emissions would still need to be cut an additional 35 percent by 2035 to align with the 2C pathway, or 55 percent to meet the 1.5C target. These steep reductions are essential to limit climate damage, economic disruption, and the growing dependence on high-cost, high-uncertainty carbon removal technologies.

For insurance professionals, this overshoot of the 1.5C mark—likely within the next decade—translates directly to more frequent and severe weather events, elevated insured losses, and escalating costs in catastrophe-exposed regions. Notably, the report underscores the disproportionate impact of climate change on vulnerable communities, increasing the moral and financial pressures on insurers and governments alike to address protection gaps. Insurers must also contend with regulatory shifts, including pressure for climate-aligned disclosures and loss prevention strategies that factor in the expanding risk envelope.

Though bleak, the report does outline feasible, albeit politically challenging, pathways to limit the duration and scale of overshoot. Existing technologies like solar and wind power are economically viable and scaling quickly. If backed by policy reform, international financial restructuring, and robust support to developing nations, accelerated decarbonization could still reduce warming and ease the burden on future claims. For adjusters, understanding these mitigation dynamics is essential—not just for forecasting risks, but for adapting operationally to more complex claims environments where climate attribution, resilience standards, and evolving liability frameworks increasingly come into play.

In summary, the Emissions Gap Report 2025 offers not just a climate analysis, but a call to action for risk-centric industries. Insurance professionals should treat the report’s findings as a guidepost for strategic planning, catastrophe modeling, claims handling evolution, and engagement with policy and resilience initiatives. The climate crisis is not only a threat multiplier—it is a reshaper of the entire risk landscape, and preparation must begin now.