Trial by Fire: Managing Climate Risks Facing Insurers in the Golden State


September 2018

Climate change presents a wide range of risks to California’s insurance industry, as Californians across the state contend with unprecedented wildfires, changing storm patterns, increased risks of flooding and sea level rise, and disruptions to business from agriculture to fisheries and beyond. Potential decarbonization of the economy and litigation based on climate-related damages further threaten the insurance business model. The industry faces these dynamic challenges at the same time that insurance products are becoming more necessary but less available and affordable.

To tackle these issues, the California Department of Insurance (CDI), under the leadership of Commissioner Dave Jones, has spearheaded efforts to drive insurers to disclose climate risks, divest of fossil fuel-related investments, and maintain the availability and affordability of insurance in vulnerable areas. In June 2018, CLEE hosted a symposium to discuss these and other initiatives and spark a conversation among stakeholders across California’s insurance and climate regulatory communities.

CDI and CLEE, together with lead author Dr. Evan Mills, are releasing Trial by Fire: Managing Climate Risks Facing Insurers in the Golden State. This comprehensive report documents the nature and extent of the risks faced by insurers and residents in California and offers a range of recommendations to protect the industry and the entire state. Trial by Fire includes detailed discussions of CDI’s landmark efforts to date; physical, transition, and liability risks; challenges to insurance affordability, adequacy, and availability; the opportunities presented by “green” insurance products; potential legislative and policy reforms; and solutions for industry, regulators, and consumers to preserve a viable insurance industry in a changing climate.

Download the Report:

Trial by Fire: Managing Climate Risks Facing Insurers in the Golden State (September 2018)

For More Information:

Contact Ethan Elkind, Director of the Climate Program, Center for Law, Energy & the Environment at UC Berkeley Law or Ted Lamm, Research Fellow in the Climate Program