The Cambridge Institute for Sustainability Leadership (CISL) has launched the ClimateWise Insurability Matrix, a first of its kind early warning and engagement tool to help insurers better assess and communicate the insurability of locations and projects to financiers, corporates and policymakers.
Natural disasters caused $318bn in losses in 2024, 25% above the ten-year average, with over half of those losses uninsured. The “ClimateWise Insurability Matrix: A shared language for ecosystem-wide action,” report is a tool that enables stakeholders to propose the precise levers needed to halt declining coverage, supporting coordinated action across the industry to help protect vulnerable communities from a widening insurance gap.
A crisis that affects everyone
As extreme weather events intensify, insurability is emerging as one of the most important resilience signals. When insurance coverage is restricted, becomes unaffordable, or withdraws entirely, it creates an economic domino effect. Lenders cannot issue mortgages or loans against uninsured collateral, property values and tax bases decline, investment flees, and municipal finances come under strain. Disaster recovery becomes slower, costlier, and reliant on ad hoc government aid, driving financial inequality. The Insurability Matrix is designed to diagnose these bottlenecks and help (re)insurers to communicate them before the market retreats.
Future insurability challenges are not an inevitable outcome of climate change, but a function of policy and investment choices made today. An ecosystem-wide approach is needed to ensure that vulnerable places are not left in the lurch following severe flooding, wildfires, or extreme weather.
The Matrix serves as the practical catalyst for this collaboration at the outset of the project rather than when it is already too late. By providing a common language across seven components which drive insurability, the Matrix allows businesses, governments, and communities to work together to proactively invest in resilience, reduce risk, maintain affordable insurance, and reinforce the conditions for further adaptation, ultimately driving a resilience dividend.
The Insurability Matrix is designed as a structured diagnostic and engagement tool, rather than an underwriting engine or actuarial pricing model. It evaluates insurability across seven critical components: Data and Modelling, Physical Resilience, Policy Alignment, Market Capital and Capacity, Stakeholder Awareness and Financial Literacy, Accessibility and Affordability, and Recovery Ecosystem.
It evaluates insurability by assigning each of its seven core components a traffic-light status: Red (materially undermining insurability), Amber (under pressure), or Green (adequate to support insurability). Crucially, these ratings are accompanied by a forward-looking trend signal - indicating whether the risk is improving, stable, or declining - and specific "Pathways to Green" that map out the targeted interventions and key stakeholders required to restore or maintain coverage.
CISL Director of the Centre for Sustainable Finance Dr Nina Seega said that in 2024, more than half of the world's natural disaster losses went uninsured, and so it cannot be just an insurance problem, but is a financial stability problem, a development problem, and ultimately a climate resilience problem.
“The Insurability Matrix is our contribution to solving it: a structured diagnostic tool that assesses the conditions driving insurability across seven components, from physical resilience and policy alignment to market capital and affordability, giving insurers, financiers and policymakers a shared language to identify where coverage is under pressure and what targeted action is needed to maintain it. Crucially, the Matrix connects directly to the recent work of our Banking Environment Initiative on 'Resilience-Adjusted Credit Risk', allowing lenders to systematically integrate these insurability and adaptation conditions into their own credit risk assessments.”