The Impact of Climate Change on the Insurance Industry: Perceptions of Industry Experts and Corporate Responses

Abstract

The impact of climate change is posing substantial risks for contemporary businesses and individuals. In response, insurance companies are adapting old and adopting new strategies and practices. This study aims to identify operational and structural changes that insurance companies implement in response to risks posed by climate change. The overarching goal of this study is to understand the perceptions of industry experts about how climate change impacts the insurance industry, and identify corporate responses to the pressures stemming from climate change and the rising societal awareness of its impact. Using qualitative research methods, we gathered primary data from eight interviews with senior executives involved in sustainability initiatives within the insurance industry, along with secondary data on Singapore’s three largest insurance companies. Our findings indicate that industry experts view climate change as a significant external force influencing corporate strategies and operational frameworks. Further, insurance companies are investing in environmentally friendly businesses, changing product portfolios, and developing collaboration with administrative and regulatory bodies. Implications of these findings for managers and policymakers are discussed, along with directions for future research.

1. Introduction

The consequences of climate change, such as higher total seasonal rainfall, rising sea levels, and more frequent, severe, and interconnected extreme weather events, pose physical dangers, decrease the availability of goods, and cause productivity disruptions (Batten et al., 2020). As an industry that shoulders risk for customers that span economic sectors and generates systemic risk on financial markets (Denkowska & Wanat, 2020), the insurance sector is prone to face consequences of climate change (F. Zhou et al., 2023). The insurance industry, concerned with insurance of risks for personal lives and businesses, suffers the negative impact of events resulting from climate change (N. Zhou et al., 2024; Knittel et al., 2024; Boivin et al., 2025; Noussia & Nousias, 2024).

Simultaneously, however, individuals and businesses concerned about the consequences of climate change seek new insurance for their property and products related to health and life insurance. Thus, insurance companies gain significant premiums (Gizzi et al., 2021). Hence, the threat of climate change has become a positive factor in revenue generation. Considering the mixed effects of climate change on consumer behavior, insurance companies are undergoing significant changes in responding to new threats and opportunities (Lawrence et al., 2020).

In this paper, we aim to understand the perceptions of industry experts, i.e., senior executives in charge of the sustainability of insurance companies, on changes in the industry that affect climate change. Next, we present three illustrative case studies of insurance companies to identify strategies and practices put in place to respond to the perceived consequences of climate change. Specifically, this study is guided by the following research questions:

• RQ1: What is the impact of climate change on the insurance industry?
• RQ2: Are the consequences of climate change perceived as positively or negatively affecting the performance of insurance companies?
• RQ3: How can the insurance industry be made sustainable?

This paper is structured as follows. The next chapter reviews the literature on climate change’s actual and potential consequences for the insurance industry. Then, Section 3 details the methods of data collection and analysis techniques. The following section includes a presentation of empirical findings, which are also discussed in relation to the previously reviewed literature. The last section offers a discussion of the theoretical and practical implications of the findings, together with an elaboration of the limitations of this study and directions for future research.

2. Literature Review

2.1. Impact of Climate Change on the Insurance Industry

As per the definition provided by the United Nations (2023), climate change is a long-term shift of environmental changes, such as changing patterns of weather or massive fluctuations in temperatures. The continuous increase in natural disasters heavily disrupts the insurance industry, necessitating a focus on damage control. Companies in the insurance industry need to cope with more frequently occurring catastrophic natural disasters. In principle, insurance protects human life and financially supports longevity. However, there is a limit to protection or providing coverage. The increasing issues and the rising consequences of climate change have severely impacted human health. Insurance companies cannot offer all types of coverage or try to cover all activities under one umbrella.

As Savitz and Dan Gavriletea (2019) observe, climate change phenomena such as extreme weather events, rising sea levels, floods, and storms increase the severity and frequency of loss events and weather-related disasters. These climate change events affect not only properties and infrastructure but also many people’s lives. Consequently, people turn to property and casualty insurance to address financial risks generated by these climate change events, encouraging the insurance industry’s growth. Similarly, Collier et al. (2021) have argued that casualty and property insurance has become an effective approach to risk management to deal with the problems posed by climate change on the environment and protect individuals, organizations, and society as a whole. This type of insurance provides financial support and protection from climate-related issues; thus, its demands are growing worldwide. E. Mills (2007) has also argued that insurance companies are experiencing a significant rise in property-casualty claims arising from natural disasters compared to other types of losses.

Considering health-related risks associated with climate change, Khraishah et al. (2022) argue that climate-related health issues lead to severe heart problems, and the number of heart patients is increasing as a result. Insurance companies cannot provide extensive coverage to respond to that phenomenon due to insufficient data for underwriting, which puts their business under threat. According to Fritze et al. (2008), climate change is increasing the cost of production and distribution because of growing competition for water and energy resources. Consequently, insurance costs have also been expected to rise because of the high demand for insurance claims (Alokla et al., 2025; Arora & Aditya, 2024; Gupta et al., 2024). These rises make it challenging for low-income households and underinsured people who experience an adverse health event due to increased financial stress and irreversible loss of belongings. Adding further, Bouwer (2011) has argued that most insurance companies experience economic losses post-disaster by compensating policyholders primarily due to the losses incurred by people from climate-related hazards like storms, droughts, floods, or landslides.

2.2. Necessity of Sustainability in the Insurance Industry

The sustainability of Singapore’s insurance companies is under threat due to the rising number of natural disasters. The prime target established for insurance companies is the adoption of net zero emissions by 2030 (Sasse et al., 2020). Coping with natural calamities is a task for more than one sector. It is a deep-rooted requirement for the world to make a collaborative strategy and harness sustainability parameters. Financial activities often have a profound impact on environmental activities. Insurance companies try to provide coverage for limitations. However, the areas with climate-related risks are increasing significantly, leading to rooted issues. The insurance companies work as a protective shield to give financial security and work towards long-term success. Deschryver and De Mariz (2020) state that sustainability strategies mainly protect social liabilities and act for climate disasters. The most significant advantage of adopting sustainability programs for insurance companies is harnessing the bond between the communities, focusing on improving people’s lives, and setting a better future. Insurance has also led to the utilization of natural resources and made people aware of their responsible usage.

The existing literature demonstrates that insurance remains effective in ensuring people are secured from future losses or damages, such as risks to health, property, or liability (Singh, 2024; Shikuku & Ochenje, 2025; Attipoe & Adams, 2024). However, the consequences of climate change, such as accidental injuries from floods, fires, the spread of diseases, and lost infrastructure, make the insurance industry suffer significant losses by compensating many policyholders. Insurance companies absorb the increased climate change risks faced by individuals and other sectors, making the study of major insurance firms across a nation-state an important contribution to the literature. This study builds on previous work in illustrating that it has become essential for companies operating in the insurance industry to adopt sustainable practices to reduce negative environmental impact, better address the growing need for insurance claims, and ensure long-term success for the organization and society at large (Kiwanuka & Sibindi, 2025; Oquendo-Torres & Segovia-Vargas, 2024; Eling, 2024; Odunaiya et al., 2024).

3. Methodology

Examining the impact of climate change on the insurance industry requires specific, in-depth industry knowledge. Therefore, collecting data from a large population is not feasible. The effects of climate change on the insurance industry are a descriptive phenomenon that varies from individual to individual. Owing to this, there is a need to provide more space for the participants to express their views on this topic. Therefore, qualitative data was identified as the most effective method to collect for this study. In this scenario, the inductive research approach is the most practical (Bell et al., 2022) as it directs the research towards collecting more specific observations. Based on these observations, this study aims to present generalized outcomes (Tjora, 2018) on the recent impact of climate change on business (Creswell & Clark, 2017).

In addition to interviews, under this approach, we reviewed the related literature (Maxwell, 2018), providing additional background and context to the interviews.

3.1. Data Collection

Researchers need to select accurate data collection methods to make informed decisions and maintain research quality and integrity (Moser & Korstjens, 2018). During the data collection process, researchers must determine suitable sources of data, types of data, and methods of collecting data.

This article employs both primary and secondary research to address the objectives. The benefit of conducting secondary research is that secondary data can be less time-consuming to collect and analyze (Watkins, 2022). Therefore, the case study model has been employed as a secondary research method because it offers comprehensive insights into specific research topics. It provides sufficient qualitative data and enables the exploration of real-world scenarios. Hence, the method helps understand the complexities of climate change in the insurance industry (Yin, 2009).

We adopted the interview method for the collection of primary data because the interviews allow researchers to uncover complex, intricate, and sensitive information (Alshenqeeti, 2014). This was essential for our study, in which we sought in-depth insights with personal perceptions. The interview guide, available in Appendix A below, illustrates the kinds of questions asked. However, as a qualitative inquiry, the interviews were interactive, and the questions only served as a guide. To assist with the analysis, responses were analyzed by theme using the NVivo software (version 14), a popular software package often used to analyze qualitative data.

To gain diverse perspectives on the topic, senior executives with roles and participation in sustainability initiatives from different insurance companies in Singapore were selected to be interviewed. Eight individuals holding top positions, including Senior Vice-President (SVP), directors, managers, and chief sustainability officers, were interviewed. These participants were selected from different insurance companies in Singapore to capture broader practices and insights on the impact of climate change within the industry. This approach has allowed the researchers to gain unique experiences and expertise from top insurance company officers on the issue of climate change and how it affects the insurance industry. It has also contributed to acquiring valuable information regarding the impact of climate change on risk assessment, decision-making, and sustainability strategies in different insurance companies in Singapore. This also facilitated making recommendations for companies to better tackle the dynamics of climate change.

The table below illustrates the interviewees’ age, gender, and position in the company (

Table 1. Profiles of interview respondents.

Age	Gender	Position
45	Female	SVP Sustainability
53	Male	CSO
45	Male	Director
30	Female	ESG Team Lead
41	Female	Senior Manager
31	Female	Associate ESG
34	Male	Manager
29	Female	Manager

).

3.2. Data Collection Procedure

This research used a purposive sampling strategy to gather the most relevant primary data because purposive sampling allows the selection of only the population that is found most pertinent to addressing specific interests and needs of research (Campbell et al., 2020). Unlike random sampling, which selects samples on a random basis and, in turn, raises concerns related to bias, the purpose sampling technique saves resources and time for researchers by making them focus only on targeting individuals who are found most likely to offer detailed and valuable insights on the subject under investigation. This, in turn, increases the possibility of gaining more meaningful data to reach a logical conclusion (Sharma, 2017). Therefore, based on expert knowledge held by participants on sustainability and climate change issues, eight individuals were selected, including a Senior Vice-President (SVP), managers, directors, and chief sustainability officers holding top positions from different insurance companies in Singapore.

An increased emphasis has been placed on approaching all participants following an ethical and planned process. LinkedIn was used as a professional networking platform to find and reach participants. Personal Insurance companies’ HR contacts have also been utilized to refer the author collecting data to the appropriate respondent to be interviewed. The request to participate in this research was sent via email, and the purpose of this study, its aims and objectives, and how their contribution can help derive findings have been clearly outlined. The addressed professionals have also been informed about the voluntary nature of participation and the privacy and confidentiality aspects maintained in this research, such as non-disclosure of their professional and personal information and the right to leave the interview without justification. They have also been encouraged to ask questions about their queries and seek clarification before deciding to participate in this research.

Despite significant efforts to contact participants, only nine professionals responded to the emails, and one was unable to participate in the interview due to time constraints. As a result, eight participants were selected for an interview as a final sample, as they agreed voluntarily to participate. In the next stage, another email was sent to all eight participants, asking them about their preferred time and location for the interview. It was collectively decided to conduct 30 to 60 min interviews during lunch breaks from late December 2023 to January 2024. Moreover, based on their preference for location, the interview was scheduled at the participants’ offices, providing a comfortable and familiar environment for the discussions. Online interviews were also allowed in the participants’ comfort zone. The collaborative approach to scheduling interviews ensured maximum convenience to all participants while encouraging them to participate actively in the research process.

In addition to selecting secondary data, the research approach involved conducting an extensive review of industry reports, online databases, and academic journals. The primary emphasis was on gathering sufficient information about “The Big 3” in Singapore (AIA, Prudential & Great Eastern Life) for secondary data and, in turn, determining how climate change has affected the companies’ performance. Databases such as Google Scholar and JSTOR were searched extensively. Google’s search engine was also used to find suitable online sources. Keywords “AIA Singapore,” Prudential Singapore,” “Great Eastern Life Singapore,” “Climate change,” “Sustainability,” and “Insurance industry” were searched over academic databases and search engines. This practice helped identify and select relevant secondary sources related to the “Big 3”. As with the primary data collection, ethical standards required by the University of Nottingham were observed, following the recommendations of Wiles (2012). Hence, the systematic approach adopted for searching both primary and secondary data helped generate triangulated findings and, in turn, increased the validity, appropriateness, and robustness of research findings.

3.3. Data Analysis

Qualitative data analysis techniques were employed since the collected data are all textual (interview transcripts, company reports, research papers, and similar publications). Firstly, the interview data was analyzed using the thematic analysis method following the recommendations of Braun and Clarke (2021). The content analysis method was used to analyse the case study data, similar to other studies that use thematic analysis of textual secondary data (Hajdukiewicz & Pera, 2023). In the content analysis method, particular themes are generated, and the key findings of the case study are analyzed under those themes. The content analysis method is prevalent in research studies using the case study method for data collection (A. J. Mills et al., 2009). Lastly, the archival data were used according to the recommendations of Chandola and Booker (2022).

To examine the qualitative data obtained from interviews with insurance executives, a thematic analysis using NVivo software (version 14), a software that assists with the analysis of unstructured qualitative data, was conducted. The eight senior executives were interviewed to gather unique perspectives on climate change and the insurance sector. For performing the thematic analysis, three themes were formulated based on the research questions so that the research findings can be used to obtain the best answer for all these research questions. The codes that outline unique perspectives were also formulated in the interview analysis processes, and a combination of multiple codes is closely associated with the themes (Nowell et al., 2017).

The coding process included systematic labeling of the interview segments and concepts, which can be used to frame the themes. The mentioned themes in the thematic analysis also provide holistic perspectives that can be used to extract insights and patterns (Castleberry & Nolen, 2018).

Table 2. Themes and corresponding codes used in the analysis.

Themes	Codes
Impact of Climate Change on People and the Insurance Industry	General Background, Climate Change Awareness, Climate Change and Human Rights, Customer Expectations
Influence of Climate Change on the Performance of Insurance Industry	Industry Impact, Risk Assessment and Measurement, Policy and Regulations, Innovation and Products, Collaborations and Partnerships
Recommendations for the Insurance Industry to Deal with Climate Change	Data and Analytics, Future Outlook, Recommendations

below contains the themes and their associated codes.

4. Results

4.1. Thematic Analysis

4.1.1. Theme 1: Impact of Climate Change on People and the Insurance Industry

General Background

This code aims to understand the roles, responsibilities, and experience of insurance industry executives, particularly in relation to climate change. This code also serves as a foundation for understanding the integration of sustainability roles and responsibilities in the insurance sector.

The executives from the insurance industry offered valuable insights into the roles and responsibilities that help manage the multifaceted nature of the insurance industry. The executives in the insurance industry are found to be engaging in environmental, social, and governance (ESG) roles, which help insurance companies oversee compliance with sustainability. The executives are also found to manage the risk strategy and functions so that climate-related risks can be countered proactively and efficiently. The role of executives from the insurance industry also remains focused on enhancing community engagement, providing training and development for the workers, and taking initiatives to attain net-zero and sustainability objectives. Some respondents also highlighted that insurance companies consistently focus on adopting innovations that can be used to counter climate-related threats.

Climate Change Awareness

The climate change awareness code has been formulated to examine the awareness and understanding of insurance executives overseeing climate change-related scenarios. The executives demonstrated thorough knowledge of the insurance industry and climate change-related risks. The respondents mentioned that climate change is prompting higher temperatures, altering weather patterns, and influencing diversity and human-related activities. The knowledge and experience of insurance executives are also crucial for leading interventions and developing innovative insurance products to provide effective insurance plans. The executives were also found to be engaged in assessing the fundamental risks that are induced by climate challenges. The executives are also involved in climate risk reporting and disclosure, which reflects their awareness of the nuances of climate change. Through strong knowledge, executives from the insurance industry can develop robust strategies to counter climate change-related risks.

Climate Change and Human Rights

This code highlights the ethical dimensions of the insurance industry in dealing with climate change issues and risks. The adoption of ethical dimensions, such as human rights, is particularly focused on making the insurance industry more responsible and credible to investors and society.

The respondents highlighted that climate change and human rights are interlinked perspectives because these form an integral part of insurance industry value chains. The respondents also acknowledged the importance of protecting human rights when dealing with climate change risks. Further, the executives mentioned that insurance companies should avoid investing in sectors such as coal, tobacco, and weapons because these areas remain at high risk for human rights violations. Similarly, the respondents also outlined that the transition to a greener economy can be less affordable and less financially viable, which requires high upfront costs, retraining employees, or retrofitting existing facilities, which might exacerbate social inequalities due to costs, access to resources, job displacements, geographical disparities, and policy impacts. The insurance industry is also responsible for providing insurance to people and property impacted by natural disasters and, therefore, conducting business activities ethically and responsibly is a concern. However, some groups of individuals/businesses affected by socio-economic factors might be unable to afford the premiums.

Customer Expectations

This code examines the expectations of consumers from insurance companies to counter the risks posed by climate change. Consumer expectations are also closely tied to the need for consumers to obtain insurance for sustainable products and infrastructures.

The responses indicate that consumer expectations are increasing within the insurance industry, prompting insurance companies to offer climate change-related coverage and services. The executives also emphasized that consumers prefer sustainable products, and investors are also investing in sustainable and resilient projects. The clients also expressed their interest in making ESG investments and contributions, which acknowledge the importance of measures taken to counter climate change risks. However, returns are still the clients’ priority. While customers appreciate sustainable products, they still want products that meet their insurance or investment needs. The respondents also focused on influencing the insurance companies to conduct their business transparently and responsibly. This can be attained through transparent disclosures, which enable insurance companies to provide insurance and compensation for climate events. Insurance companies have also been found to invest in ESG funds and policies that can positively influence sustainability. The insurance industry is also required to meet customer expectations through climate-conscious offerings.

4.1.2. Theme 2: Influence of Climate Change on the Performance of the Insurance Industry

Industry Impact

The code of industry impact is formulated to explore the landscape of the insurance industry in dealing with sustainability and climate change issues at the broader level. The specific challenges and complexities faced by the insurance sector in dealing with climate change-related risks are also evaluated.

From the responses analyzed by the executives of the insurance industry, it was determined that the insurance industry is focusing on understanding and integrating ESG considerations so that sustainability efforts can be improved. However, due to a lack of awareness from the public, data, and standardization, efforts are being diminished. The evolving nature of ESG considerations in the banking and insurance sectors also contributes to the sustainability perspectives. The executives also outlined that climate change influences higher insurance risks during disasters and in vulnerable environmental conditions. The property insurance sector also faces losses during disasters and, therefore, requires consumers to pay higher insurance premiums. Regulations also incentivize the insurance companies to implement climate action policies. The executives pointed out that climate change is bringing far-reaching consequences for the insurance sector because mortality rates and claims are affected. For example, increased mosquito populations cause increased infections from some diseases. Challenges are faced in both investments and underwriting. Due to a lack of data and accuracy, actuaries are using estimations on risk models, which may cause higher costs for both the company and consumers.

Risk Assessment and Measurement

The code of risk assessment and measurement is focused on assessing the climate change risks that can impact the whole insurance industry.

The insurance industry has adopted multifaceted approaches to assessing and managing climate-related risks. Enterprise risk management approaches are also being adopted and implemented to counter climate risks and prioritize investment in climate-resilient products. The insurance industry also takes risk assessment and measurement seriously, as reflected in the ESG reporting. The adoption of structured risk management approaches also helps insurance companies identify risks, measure them, and counter them efficiently and effectively. Insurance companies also adhere to the net-zero commitment through risk assessment and measurement, helping clients and consumers attain environmental sustainability.

Policy and Regulations

This code is formulated to outline the influence of governmental and industry-level policies and regulations on the insurance industry in dealing with the climate crisis and the response of insurance companies to take climate action.

The respondents emphasized the need for the insurance sector to adopt and implement governmental policies and regulations to enhance its response to climate change. The respondents also noted that the Monetary Authority of Singapore’s (MAS) environmental risk guidelines are also being used to rely on relationships, trust, and competition rather than managing the insurance sector through penalties. Companies are also getting financial and investment support from the Singapore government, which is helping them make a smooth transition. To attain regulatory compliance, the insurance companies collaborate with other sectors such as banking and finance. The executives also outlined that the transition planning guidelines and environmental risk guidelines are essential for enhancing the insurance industry’s response to climate change.

Innovation and Products

The code representing innovation and products provides the innovative strategies and products that insurance companies are launching for the consumers to protect against the natural disasters that are direct results of climate change.

The results obtained from the thematic analysis of interview responses highlighted that innovative strategies and creative insurance products benefit consumers in countering climate-related risks. Innovative products, including sustainability funds, insurance coverage for electric vehicles, green infrastructure products, and individual insurance company apps, demonstrate the insurance sector’s commitment to adapting to climate change. The executives also emphasized the importance of careful investment and underwriting reviews, particularly in high-risk areas, to reduce the financial risks in the insurance sector. The respondents also acknowledged that the insurance industry is required to adopt and implement the new standards as well as provide insurance coverage for green buildings and infrastructures.

Collaborations and Partnerships

In this code, the collaboration and partnership aspects of the insurance companies are examined so that the collaboration and partnership strategies can be used to enhance climate resilience as well as reduce the economic impacts of climate-related events.

The respondents mentioned that the insurance companies are partnering and collaborating with other sectors and associated insurance companies to address climate change risks. Insurance companies are collaborating with research institutions, reinsurers, real estate developers, and regulators to enhance efforts to counter climate-induced risks. The respondents also outlined that the insurance companies are partnering with academic forums to use academic knowledge to manage climate-related risks. The use of underwriting, sustainability funds, and investment partnerships is helping insurance companies navigate these complexities.

4.1.3. Theme 3: Recommendations for the Insurance Industry to Deal with Climate Change

Data and Analytics

In this code, the role of data and analytics in the insurance industry is examined so that climate-related risks can be identified and evaluated proactively. Data analytics plays a crucial role in risk identification and assessment.

The results obtained from the thematic analysis highlighted that data and analytics play a crucial role in assessing climate-related risks as well as setting the prices for insurance products. The insurance executives mentioned that insurance companies are adopting artificial intelligence and automation to analyze climate data and enhance risk assessment scenarios, increasing the efficiency of the firms by managing mundane matters and leaving more time for critical issues. On the other hand, the executives also reported that the lack of data is a significant challenge for insurance companies. The associated challenges, such as data granularity and data integrity, are also found to be influencing the insurance industry negatively. To analyze climate data effectively, insurance companies are advised to leverage technological advancements that offer valuable insights.

Future Outlook

This code highlights the respondents’ foresight in addressing climate-related risks within the insurance industry, offering futuristic directions and strategic measures for the sector.

The insurance industry must anticipate future climate change-related risks efficiently and proactively, rather than being reactionary. In this context, the executives outline that consumer expectations vary, and regulators emphasize the need for strict policies for climate-related risks. Regulators will slowly increase the requirements for ESG, and companies will have to adapt. The respondents also mentioned that the insurance industry is playing a critical role in climate adaptation and, therefore, should grade the products accordingly. To manage future situations, the insurance industry must invest more in green infrastructure projects rather than just insuring carbon-intensive projects.

Recommendations

In this code, the insights gathered from the interview responses are evaluated so that practical recommendations can be provided to the policymakers and stakeholders. Providing recommendations for the insurance industry can influence positive outcomes, as well as managing climate-related risks and uncertainties. The executives from the insurance industry also offered practical recommendations for the insurance companies, various stakeholders, and policymakers so that the response to the impacts of climate change can be enhanced and positively impact society. The practical recommendations involved using transparent reporting and highlighting the importance of climate risks in the insurance sector. The government and private sector should collaborate and invest in sustainable and green projects. The associated suggestions are highlighted, including transferring risks, setting the pricing mechanisms, adopting innovative policies, and taking strategic measures. The adoption of such recommendations can enhance the capability of insurance companies to respond to climate risks and do business efficiently. As EVs become the future of vehicles, it is essential to have pricing mechanisms and innovative policy designs in place for EV insurance.

Figure 1 shows that the respondents primarily highlighted the climate change and human rights issues, followed by the industry impact. Innovation, products, collaborations, and partnerships were the least cited issues.

4.2. Illustrative Case Studies

The impact of climate change on the insurance industry is vital, as it has affected operations, corporate policies, and expenditures of insurance companies. To understand the impact of climate change on the sustainability of insurance companies empirically, it is necessary to study responses at the company level through case studies of major insurance providers. In these cases, the impact of climate change on the company’s commitment, policies, and working norms has been studied for the “Big 3” of the insurance industry in Singapore. Combined, these companies comprise the majority of the insurance market share in Singapore, and each was designated a domestic systemically important insurer under a scheme recently enacted in Singapore to strengthen oversight of the insurance industry (Insurance Asia, 2024). The life insurance sector in Singapore grew 19.7 per cent in 2024, illustrating the growing importance of the industry in the country (Life Insurance Association Singapore, 2025).

4.2.1. Case Study 1: AIA Insurance Company

AIA Insurance is one of the major insurance companies operating in Singapore and the second-largest life insurance company across the globe. The company owns the largest pool of agency resources and employs more than 4000 professional financial services consultants. The company was established in 1931 and has more than 90 years of experience in the industry. The company has more than one million policyholders in the country, making it a major player in the country’s insurance industry (AIA Insurance, 2024a).

There is a clear impact of climate change and environmental risk that can be witnessed in the company’s policies, considerations, and commitments. In order to deal with climate change-related issues, the Monetary Authority of Singapore issued Environmental Risk Management Guidelines for insurers in December 2020. In the alignment of these guidelines, AIA Insurance has made some strategic and structural changes in its Environmental Risk Management (ERM) approach (AIA Insurance, 2024b). This approach considers that climate change and environmental risk can affect the company’s profits and sustainability through two different channels. The first channel is physical risks, which arise from natural disasters due to climate change. In such risks, the company may have increased payouts to policyholders. The second channel is transition risks, which arise due to changes in government policies, shifts in people’s preferences, and changing investor demands in the context of climate change. The company has undertaken significant policy changes to counter these impacts of climate change on its financial health and operational framework (AIA Insurance, 2024c).

As per the company’s ERM approach, climate change is considered an environmental risk that can harm the company’s sustainability. In this regard, insurance and investment portfolios undertaken by different companies can damage the environment and promote climate change risk to society and business. Considering these risks, the company has decided to completely disinvest its directly managed listed equity and fixed investments from all the coal mining and coal-fired power businesses (AIA Insurance, 2024b). This policy change is triggered by the massive amount of carbon emitted by such companies into the environment, which is resulting in climate change. Moreover, AIA has changed its investment policies and started investing more in business, promising its initiatives to deal with climate change. In addition to this, the company has put more focus on developing resilience towards climate change risks. For example, the company has developed a standard set of principles and guidelines for measuring carbon emissions through its operations, as prescribed by the Partnership for Carbon Accounting Financials (PCAF). In 2021, the company set a net-zero GHG emission target for 2050 with the help of sustainable practices. In addition, the company has shown its commitment to the Science Based Targets initiative (SBTi), a global organization working to help companies reduce their aggregate carbon emission, which is causing climate change (AIA Insurance, 2024b). SBTi provides an independent audit of the target set by AIA and validates the company’s progress on the existing target.

In addition, climate change issues have also affected the company’s reporting practices, making them more transparent and well-structured. On the advice of the Task Force on Climate-related Financial Disclosures (TCFD), the company published its first climate-related disclosures in 2019. This initiative aimed to promote transparency in the monitoring reports and progress of the company’s efforts towards environmental sustainability. This disclosure reflects the four pillars of the company’s commitment: effective governance, strong strategic orientation, clear risk management, metrics, and targets.

The climate change issue has also incentivized international authorities to monitor firms’ activities. In this regard, the Monetary Authority of Singapore has developed the Green Finance Industry Taskforce (GFIT), and AIA has become an active member of the initiatives and consultations of this task force (AIA Insurance, 2024c).

Moreover, climate change issues and environmental sustainability concerns have also motivated the company to make structural changes in its administrative framework. In this regard, after 2020, the company established specialized committees and boards to monitor and ensure the effective compliance of practices with environmental sustainability regimes. For example, the company established the Board Risk Committee (BRC), Financial Risk Committee (FRC), Operational Risk Committee (ORC), and Environmental, Social, and Governance Management Committee (ESGMC). All the committees report directly to the board, which is responsible for all the environmental sustainability practices. In addition to this, as per the recommendation of the Task Force on Climate-related Financial Disclosures (TCFD), the company has started to develop and publish environmental risk disclosures on its websites and annual reports so that all the stakeholders of the company can have the required information regarding the company’s practices and policies for dealing with climate change related issues (AIA Insurance, 2024b).

These are the major initiatives and policy changes undertaken by the AIA to be more responsible for environmental sustainability. These changes illustrate the significant impact of climate change on an insurance company’s operational framework.

4.2.2. Case Study 2: Great Eastern Life Assurance Company

Another case study exploring the impact of climate change on the insurance industry is the Great Eastern Life Assurance Company. This company was established as a life insurance company in 1908 in Singapore and Malaysia. The company holds more than S$100 billion in assets. The company also has 16 million active policyholders who are being provided with insurance solutions with the help of 3 primary distribution channels (Great Eastern Assurance Company, 2024).

Climate change issues have also significantly impacted the company’s operations and structural framework. Like the AIA insurance company, the Great Eastern Life Assurance Company has also shown its commitment to achieving net-zero carbon emissions by 2050. The company has clarified its approach to becoming more resilient in the face of climate issues and has developed a roadmap for an effective transition to a low-carbon future (Great Eastern Assurance Company, 2024). As per the policy initiative, the company has adopted a 3-pronged approach, identifying three key areas for enhancing its competence in preventing climate change and promoting environmental sustainability. These three areas are as follows:

• Make the company’s operations environmentally friendly to achieve a net-zero carbon footprint from operations by 2025. In this regard, the company adopted a proactive approach and started tracking its carbon footprint in 2017. In 2020, the company conducted a study of all its operations and devised an operational carbon footprint plan per the GHG Protocol Corporate Standard so that the organization can achieve the net zero target by 2025 (Great Eastern Assurance Company, 2021).
• To be more focused on investing in businesses and industries promoting environmental sustainability.
• To innovate its insurance-related businesses to deal with climate change and natural disasters due to such changes (Great Eastern Assurance Company, 2021).

The climate change and environmental sustainability issues have prompted companies to adopt fair reporting practices to demonstrate their climate impact. The Great Eastern Life Assurance Company has also aligned with the Task Force on Climate-Related Financial Disclosure (TCFD) guidelines and started to publish its climate reporting on public platforms (Great Eastern Assurance Company, 2021).

Effective digitalization of the operations can also be considered one of the significant impacts of climate change on the operations of the Great Eastern Life Assurance Company in recent times. The company continuously tries to reduce the paper-centric processes by making them digitalized. For this purpose, the company uses digitalized documentation, e-policy issuance, and e-correspondence for its customers and advisors. The company achieved 80% digital adoption by 2020 by intensively promoting its online platform for all communication (Great Eastern Assurance Company, 2021). This paperless operation represents a significant shift in the company’s operational framework, driven by climate change.

In addition, a responsible investment policy is one of the major policy initiatives the company takes to deal with climate change. As part of this initiative, the company aims to track and invest in companies undergoing the transition to a low-carbon economy. In this direction, the Great Eastern encourages companies to have long-term environmental risk mitigation planning. Along with this, the company has also put limits on investments in coal-producing companies or companies that have no energy transition plans. The insurance company has also enhanced overall investments in environmental sustainability and carbon emission reduction plans. In 2021, the company allocated S$1.6 billion to invest in its green operations. S$380 million was spent from this fund by 2021 on green loans, low-carbon equity, and green bonds (Great Eastern Assurance Company, 2021).

Climate change has also motivated the Great Eastern to form effective coalitions and collaborate within the industry to address the issue. The company has collaborated with Life Insurance Association (LIA) Singapore and conducted a survey in 2021 to track the carbon footprints across the insurance industry to find effective and holistic solutions. In addition, the company has partnered with external fund managers to provide effective internal training on sustainable and responsible investments to its investment personnel (Great Eastern Assurance Company, 2021).

Climate change has a direct impact on the company’s insurance business. The company primarily offers long-term life insurance services to its policyholders. The duration of the coverage in these policies is often an extended period. In such cases, climate change has a long-term impact on transitional costs and the value of assets. In order to deal with such risks due to climate change, the company has made changes in its product offerings. In this regard, in 2021, the company launched its first green life insurance plan, namely GREAT Green Single Premium (SP) (Great Eastern Assurance Company, 2021). This plan is a single-premium endowment plan that lasts for 3 years and provides guaranteed returns generated from the company’s green investment. The premiums collected through this plan are to be invested in specific projects such as green building development, projects related to renewable energy products, businesses related to electric vehicles, and climate change mitigation financing projects. The company is also committed to donating S$1000 to the charity Zero Waste SG for every S$1 million collected as a premium of the GREAT Green Single Premium (SP) plan. This charity works to run several programs and initiatives to enhance people’s awareness regarding climate change issues and environmental sustainability (Great Eastern Assurance Company, 2021). In this way, climate change has resulted in several crucial policies, administrative, and product-related changes for the Great Eastern Life Assurance Company.

4.2.3. Case Study 3: Prudential Assurance Company Singapore

To gain a deeper understanding of climate change’s impact on the insurance industry, this study examines Prudential Assurance Company Singapore. Prudential Assurance Company Singapore (PACS) is one of the leading companies operating in Singapore’s life insurance industry. The company offers its customers several savings, protection, and investment-like plans. As of 31 December 2020, the company had aggregated funds of S$49.3 billion under management. The company has been operating in the Singapore market for 90 years. The company has expanded its business to over 1 million customers, 5000 financial advisors, and bank partners (Prudential plc, 2023c).

The impact of climate change can be seen in the case of PACS and its policies. In order to counter the effects of climate change on society and business, the company has devised a well-structured policy and strategy, which is the Environmental, Social, and Governance (ESG) Strategy. The ESG strategy of the company directs the company to adopt three primary strategic enablers, which are as follows:

• Promote good governance and responsible business practices to reduce the carbon footprint from operational activities.
• Channelize responsible investments to promote environmental sustainability in society.
• Effective community engagement is needed to enhance awareness and education regarding the negative impact of climate change on the entire society (Prudential plc, 2023b).

Considering the potential negative impact of climate change on business and society, the company has shown its commitment to being a net carbon-zero assets owner by 2050, and for this, the company has set a target of reducing its Weighted Average Carbon Intensity (WACI) up to 25% by 2025. Along with this, the company is also seeking to be carbon neutral across all its operations by 2030 and improve the energy usage efficiency in all its offices to be responsible towards the environment (Prudential plc, 2023b).

To achieve all the targets, in 2022, the company made several changes in its operational orientation. Regarding this, the company established a cross-functional sectoral decarbonization working group within its operational workforce. This working group was directed to set a strategic direction to achieve a net-zero target and have responsible decision-making (Prudential plc, 2023b). This approach has provided a practical and strategic direction for the company towards improving environmental sustainability and reducing the negative impact of climate change.

The climate change issue has also enhanced the company’s compliance efforts related to environmental sustainability in the existing marketplace. Consequently, the company has adopted the strategy of regularly engaging with regulators to monitor climate change risks associated with initiatives in the existing marketplace. The company has considered the transition to a low-carbon economy essential for market sustainability. For this reason, the company engages constructively with different policymakers, NGOs, and related trade associations so that new standards and policies can be shaped effectively in the long run. The company actively works with private sector firms and investors to promote net zero targets. For example, in December 2022, Prudential Assurance Company was selected as the insurance partner for Vietnam’s Just Energy Transition Partnership (JETP), which is a private sector working group formed for the country to achieve the net zero target (Prudential plc, 2023b).

Further, the case of Prudential Assurance Company has also reflected the trend of having strategic alliances in the insurance industry to combat climate change issues. In 2021, Prudential entered into a strategic partnership with NZAOA (Net Zero Asset Owners Alliance) to enhance its environmental sustainability. NZAOA is a network of investors who share a common goal and commitment to making their asset portfolio free from carbon usage. This partnership aims to ensure the effective collaboration of peer companies from the same industry to develop common standards and regulations. In 2022, NZAOA organized a global summit in which Prudential led the discussion on energy transition through the insurance sector and provided effective climate solutions, especially for emerging markets. Moreover, in 2022, Prudential launched the Emerging Markets Transition Investment (EMTI) project with a global focus on changing the energy orientation throughout the emerging markets (Prudential plc, 2023a). The main objective of this project was to accelerate investment practices in emerging markets, driving the country towards a net-zero transition. In 2023, the company became the leader of the Financing Transition track by playing an active and vital role in this area.

The climate change issue has also motivated the company to develop a new product portfolio, which can enable the company to explore climate-related opportunities and deal with climate change threats effectively. With climate change, the company has witnessed opportunities in new insurance as well as savings products, which are as follows:

• New savings products that can direct investors to make investments in different green energy projects, green bonds, adaptation financing, and transition financing.
• Climate change is resulting in critical health consequences, such as the increased spread of dengue. The increasing frequency and severity of such diseases due to climate change have prompted the company to launch new health and protection plans, providing coverage for these types of diseases.
• The company has recognized that having strong financial security is an effective measure to deal with climate change issues. With this perspective, the company is driven to develop inclusion insurance products that can provide financial security to people from the harm due to environmental changes (Prudential plc, 2023a).

Along with developing a new product portfolio, the company also came up with a new ESG investment framework for the year 2022, in which the company developed an investment governance framework. This framework directs the company to allocate its investments of assets to ESG and UN Sustainable Development Goals (SDG) (Prudential plc, 2023b).

In this way, the practices undertaken by Prudential Assurance Company reflect that climate change has had a significant impact on the company’s operation and administrative framework. Moreover, it has also opened new opportunities to launch new products to deal with this issue.

4.2.4. Synthesis of the Case Studies

The three cases, which are AIA Insurance, the Great Eastern Life Assurance Company, and Prudential Assurance Company Singapore, studied in this research present some common findings that represent the holistic impact of climate change on the insurance industry of Singapore. In this regard, changes in the investment portfolio are one of the significant changes in the operational orientation of insurance companies under the influence of the climate change environment. An analysis of three major insurance companies reveals that they have all adopted a policy of reducing their investments in coal plants and businesses lacking specific sustainable plans for energy transition and decarbonization in the near future. Companies are increasingly inclined to invest in green projects or adopt practices that drive their efforts towards achieving net-zero carbon emissions.

The cases of the studied companies illustrate that, due to the increasing negative impact of climate change on society and insurance business sustainability, companies’ commitment towards environmental sustainability has become enhanced. All the companies studied have pledged to achieve the net-zero carbon emission target in the near future, and for this, all have made explicit changes in their operational frameworks. The goal of reducing carbon emissions is now the standard practice of firms in the industry.

Another crucial impact tracked through the cases of all three major companies from the Singapore insurance sector is the changes in the product portfolio. Climate change is significantly impacting the prevalence and severity of natural disasters. These conditions increase the concern for financial security among people, which is seen as a business opportunity by the insurance companies. Companies have started to design and offer new insurance products to customers that can provide coverage and protection against climate change-related issues.

Another impact of climate change is evident in the growing partnerships and collaborations between companies and regulatory bodies, including the Task Force on Climate-related Financial Disclosures (TCFDs), the Partnership for Carbon Accounting Financials (PCAF), the net-zero Asset Owners Alliance, and the Life Insurance Association (LIA). These collaborations and alliances aim to develop holistic practices and standard regulations for the entire industry, enabling the combat of climate change challenges.

5. Discussion

Concerning the first research question, which is focused on analyzing the impact of climate change on the insurance industry globally, climate change poses far-reaching consequences for the insurance sector. Respondents from diverse backgrounds and geographies report that climate change is triggering climate-related events, thereby increasing the insurance sector’s vulnerability. The insurance sector is also shifting its strategies and approaches in dealing with environmental changes. These findings are closely related to the findings of the literature, which emphasize that weather-related disasters pose challenges to the insurance sector (United Nations, 2023; Savitz & Dan Gavriletea, 2019).

As the empirical evidence aligns with the literature, it substantiates the claim that climate change is a pivotal factor reshaping the dynamics of the insurance industry. In addition to the quantitative data, qualitative responses outlined the nuanced ways in which climate change influences insurance practices globally. Interviews revealed an industry-wide recognition of the evolving risk landscape by prompting a reconsideration of policies and risk assessment frameworks. The identified impacts resonate with the literature’s depiction of insurance companies worldwide recalibrating their strategies to address the growing challenges posed by climate change (Collier et al., 2021). The empirical insights thus intricately align with the literature’s findings, which portray climate change not only as a localized concern but also as a pervasive force reshaping the global insurance sector.

Furthermore, the case study-based findings assist in discussing how ESG considerations directly impact insurance-based risks, particularly within climate change-oriented scenarios, such as natural disasters like floods. Natural events result in increased losses for insurance firms. This also highlights the need for a detailed understanding of ESG factors for effective management and mitigation of natural disaster-based risks. The case study’s findings also help affirm that climate change generates a noticeable impact on insurance firms by causing damage to personal property and economic losses. Insurance agents are required to adapt their assessment strategies to mitigate the adverse effects of climate change. In this direction, AIA has transformed its investment policies and begun investing in business firms that help deal with the losses generated by climate change.

The reviewed literature findings are different in comparison with the discussed primary findings, as they help in understanding that the phenomena surrounding climate change, which are observed in the forms of extreme weather fluctuations, increasing sea levels, prevalence of floods, as well as storms, raise the intensity as well as occurrence levels of financial losses, as well as instances of natural disasters. Climate change events have a considerable impact on buildings, construction properties, and surrounding infrastructure.

They also affect the living standards of individuals. Accordingly, individuals seek assistance from casualty and property-based insurance schemes to mitigate their financial losses generated by climate change. This encourages the growth in the demand for reliable insurance-offering companies (Savitz & Dan Gavriletea, 2019). On the other hand, research question two also discusses how climate change has had a positive impact on the insurance sector. This is evident from the case findings, which indicate that the increased incidence of climate-related disasters has led to a rise in demand for reliable property and accidental insurance policies. In this direction, the Great Eastern Life Insurance firm of Singapore has issued plans for promoting environmental risk mitigation practices on a long-term basis. Property and casualty insurance plans are the key sources for deploying risk management strategies to manage issues revolving around climate change. These insurance plans help offer protection to individuals, society, and businesses in a collective manner. Accidental and property insurance also provide financial assistance for addressing the consequences of climate problems worldwide.

The findings from the existing literature also help in discussing that insurance firms tend to experience a considerable increase in casualty as well as property loss-oriented claims that arise from natural disasters, compared with other forms of financial loss (E. Mills, 2007). On the other hand, secondary literature findings indicate that the insurance sector offers considerable opportunities for ensuring the development of the insurance sector to achieve adequate safety levels during instances of climate change. The literature findings help in understanding that the insurance businesses help in the execution of special schemes to protect farmers from huge losses due to adverse weather and climatic conditions, such as droughts and floods. Similarly, insurance businesses can also extend the coverage plans and schemes that offer security for material losses encountered by individuals who reside in high-risk locations involving residents near watercourses (Hallegatte, 2009).

Similarly, the second research question is formulated to examine the effects of climate change on the insurance industry’s performance both negatively and positively. In this context, climate change is bringing multifaceted problems to the insurance industry through operational dynamics and performance metrics. It also shows that climate change is impacting not only the Singaporean insurance industry but also the insurance industry globally. The findings outline a need to reduce the severity and frequency of financial losses resulting from climate-related risks. The literature also outlined that climate change is impacting the insurance industry negatively and positively (Bouwer, 2011). The empirical findings reveal a concerted effort within the industry to develop adaptive strategies by tailoring policies to cope with emerging climate-related risks effectively. This alignment between the empirical findings and theoretical insights substantiates the literature’s assertion that climate change is a catalyst for transforming and transitioning the insurance industry.

Furthermore, the qualitative responses also highlighted the specific challenges insurance companies face in adapting to climate change-induced shifts. Interviews with industry experts and stakeholders unveil a spectrum of issues, from revisiting actuarial models to reassessing risk exposure. These challenges resonate with the literature’s emphasis on the need for the insurance sector to proactively reshape its strategies in response to climate change’s complex and interconnected challenges (E. Mills, 2007). As the empirical results align with the findings of the literature, a comprehensive scenario emerges that depicts climate change not merely as an external factor but as a driving force shaping the intricate fabric of the insurance industry’s operational landscape.

Finally, in alignment with the third research question, which is focused on providing a practical recommendation for the insurance industry to become sustainable and counter climate-related risks efficiently, the insurance industry must adopt and implement innovative strategies. The insurance industry needs to enhance sustainability while facing climate change challenges. Respondents articulated a growing awareness of the imperative for sustainability, which aligns with the literature’s emphasis on the urgent need for insurance companies to adopt environmentally conscious practices (Deschryver & De Mariz, 2020). The empirical findings also mirrored the literature’s concerns about the rising number of natural calamities posing a threat to the sustainability of insurance companies and hence prompting the industry to adopt proactive measures such as striving for net-zero emissions by 2030 (Sasse et al., 2020). As discussed in the literature, sustainability is not merely an ecological imperative but a strategic imperative for the insurance sector, which ensures long-term viability and societal and environmental protection (Deschryver & De Mariz, 2020). Moreover, qualitative analysis enriches the understanding of the industry’s sustainability efforts by focusing on the complexities and challenges faced in implementing such strategies. Interviews with industry experts unveiled a multifaceted approach encompassing environmental conservation and fostering community resilience and social responsibility. These insights align with the literature’s depiction of sustainability strategies to strengthen the interrelationship between insurance companies and the community. This also emphasizes such initiatives’ broader societal and environmental impact (Deschryver & De Mariz, 2020). As the empirical results substantiate the literature’s theoretical framework, a comprehensive narrative emerges that portrays sustainability as a central aspect of the insurance industry. Through policies, the adoption of data analytics, and the launching of innovative insurance products, the insurance industry can counter the challenges posed by climate change as well as ensure the industry’s success during challenging periods. Because insurance companies provide insurance to businesses across sectors, insurance companies act as a barometer for systemic and industry-specific risk. In an era of increasing disclosure requirements aimed at alleviating information asymmetry (Wan & Watters, 2021), information on where insurance companies are facing increased climate-related costs will assist companies, investors, governments, and other stakeholders in planning and mitigating risks.

The gross proportion of insurance companies in Singapore, such as Prudential Assurance Company Singapore (PACS), has reached a total of 49.3 billion Singaporean dollars, indicating a growth-oriented trend. This reflects that there is an increasing demand for insurance. However, despite the upward trends observed in the insurance sector, there are also concerns about sustainability in Singapore-based insurance firms. Natural disasters negatively impact the sustainability of insurance firms by depleting financial assets and affecting customers’ ability to access claims in the future. However, PACS has focused on minimizing its weighted Average Carbon Intensity to about 25% by the end of 2025. In support of the above, the findings illustrate that sustainability strategies employed within the insurance business segments help safeguard societal accountabilities and adopt friendly actions to mitigate climatic disasters. The primary advantage of implementing sustainability initiatives in insurance companies is to foster relationships among interconnected communities that aim to enhance individual living standards and set higher standards for future authorities. The insurance plans have increased awareness among individuals for the use of natural resources as well as enhanced awareness regarding their duties for employing natural resources (Deschryver & De Mariz, 2020).

6. Conclusions

Industry experts recognize the growing relevance of climate change for their businesses. In particular, they perceive increasing temperatures, polluted atmosphere, and rising carbon emission levels as most impactful. The case-study-based findings reveal that insurance companies are concerned about climate-change issues, which significantly impact their policies, encouraging the protection of the environment by using sustainable approaches. For example, the AIA insurance company has utilized the ERM approach to prevent physical environmental risks. Our research highlights the significant influence that environmental shifts have on operational systems, strategic endeavors, and product offerings throughout the sector. Companies have committed to achieving lofty goals by lowering their carbon footprints while progressing towards the future with lower carbon emissions. The companies are also proactively partnering with their peers within the insurance industry, government agencies, and NGOs to recognize environmental issues. The sharing of information, the development of innovative environmental protection measures, and the creation of comprehensive solutions to issues linked to climate change are all made possible by these partnerships.

The interview findings also suggest that executives in the insurance industry have become highly aware of climate-change-oriented issues, which is why the concerned businesses started conducting risk monitoring, assessment, and measurement to adhere to net-zero commitments to confirm environmental sustainability. The findings also emphasized that AIA insurance companies have become highly concerned regarding adherence to government regulations related to environmental risks, and other insurance businesses are also following the zero-transition plan launched by the government of Singapore. Insurance companies are also managing green projects along with proper financial disclosures to maintain sustainable practices. Insurance companies have been found to collaborate with financial institutions, including banks, in terms of funding support to strengthen their implementation of climate protection initiatives. While concluding the case-study-based findings, it is also noted that Prudential Insurance Company Singapore has started working in partnership with Vietnam’s JETP to fulfil the ambition related to achieving the net-zero target. Furthermore, while illustrating the initiatives of Great-Eastern-Life-Assurance-Company, the company has made significant donations as part of its charity strategy to fulfill zero-waste sustainability goals. The secondary findings also support the primary findings by highlighting that climate-change issues have gained widespread recognition within the insurance industry, prompting collaboration with financial institutions, policymakers, and stakeholders to enhance their environmental protection strategies.

Finally, we conclude that insurance companies consider environmental sustainability goals-oriented investments and contributions towards developing policies related to climate-conscious offerings as essential measures for dealing with climate-change-oriented sustainability issues. Environment risk monitoring, green infrastructure development, green financing, and regular audits of the sustainability aspect are also suggested as important measures for improving the management of issues concerned with climate change in relation to strengthening the sustainability performance of insurance companies. Overall, the findings indicate that resolving issues related to climate change benefits the surroundings and improves the resiliency, effectiveness, and long-term sustainability of the businesses operating in the insurance industry. By adopting preventative measures, promoting collaborative efforts, and developing innovative technology solutions, insurance firms can effectively mitigate climate change risks and contribute to global efforts to protect the natural environment and promote sustainability.

Limitations and Directions for Future Research

While this paper provides a novel contribution to the still scarce literature about the impact of climate change on the insurance industry and insight into the perceptions of senior executives in insurance companies, certain limitations must be addressed. These serve as a basis for the formulation of recommendations for future research. First, the personal perspectives, beliefs, and experiences of interviewed individuals are most valuable as they provide an in-depth insight into how key decision makers in insurance companies perceive the impact of climate change on their business, and how their companies should address climate-related risks. However, the use of a sample of executives representing large companies in one country, the use of qualitative methods, and the explorative nature of this research limit the generalizability of findings, which are inherently subjective. As a city-state, Singapore offers an important case study. However, the jurisdiction faces unique insurance risks as a single natural disaster could impact the entire country. This may increase focus on climate change in Singapore when compared with other countries.

Thus, we offer a few recommendations for future studies to overcome the shortcomings of this paper. First, we call researchers to explore executives’ perceptions in insurance companies of different sizes, the scope, and the location of operations. Comparing companies from countries located in areas most severely affected by climate change to those that are less exposed to such risks is one of the potentially fruitful research strategies.

It is also recommended to make use of statistical techniques to forecast future hazards related to climate change as well as estimate the possible costs that could be incurred by insurers as well as broader society as a whole (Clark et al., 2021) and cross-compare them to perceptions of executives, to identify perception gaps, and ways to bridge the actual, potential, and perceived consequences. Similarly, while outside the scope of this study, we recommend that future research develop a conceptual model for the concepts and relationships explored in this paper.

To strengthen the insurance industry’s resistance to climate change, future researchers should investigate the role of innovation and technological advancement in mitigating the risks it poses. One example of this would be the investigation of the application of new technologies already identified by Tagde et al. (2021) and Gancarczyk et al. (2022), such as artificial intelligence-based sensors, fintech, and blockchain-based technologies to enhance risk estimation, filing of claims, and emergency response.

Also, we see significant potential in exploring the intersection of public policies and corporate strategies. Building on the examples of Dale et al. (2020) and Monje-Cueto et al. (2024), we call for research exploring the role that government incentives and mechanisms for risk sharing play in promoting the responses of insurance companies to the effects of climate change, especially in areas where public-private partnerships are not common yet.

Finally, we call for studies that put under scrutiny new insurance solutions for risks unique to climate change, such as weather-indexed insurance for crops or investments in special bonds for climate change projects.