<p>Mumbai: As India accelerates infrastructure expansion to drive economic growth, a new report warns that rising <a href="https://www.deccanherald.com/tags/climate">climate</a> risks may be outpacing the country’s ability to insure these assets, potentially exposing governments and investors to growing financial stress.</p><p>The report, Climate Risks and Insurance for India’s Infrastructure, by Climate Trends finds that while most of India remains within the limits of insurability, insurers flagged mounting concerns around assets such as hydropower projects, highways, and urban infrastructure in high-risk regions.</p><p>2025 reinforced the dominance of hydro-meteorological events in India’s climate impacts calendar.</p>.Union govt ends vacuum, clarifies on use of environment funds.<p>The report notes that flooding, extreme rainfall, cyclones, and landslides were identified as high to very high risks for capital-intensive infrastructure such as urban assets, highways, ports, and hydropower projects, driving repeated losses and rising insurability concerns.</p><p>The study establishes that growing uncertainty due to climate impacts is making accurate risk pricing more difficult, potentially widening the protection gap between economic losses and insured coverage.</p><p>The authors spoke with several leading insurance companies of the country, like SBI General Insurance, Munich Re India, Swiss Re India, and General Insurance Corporation of India. </p><p>Aarti Khosla, Founder & Director, Climate Trends said, "As India seeks big investments at the World Economic Forum and plans double-digit (nominal) growth over the next five years, it would be remiss to not point out the risks to India's infrastructure posed by climate impacts and extreme weather events – which are unarguably increasing in frequency, severity, and geographical spread.”</p><p>“The country's rising exposure for its essential assets could thus lead to mounting climate-induced losses, which would be a fiscal and financial burden. Climate resilience must therefore be integrated into infrastructure planning from the very beginning to minimise the costs of post-disaster</p><p>reconstruction. Also, several steps will have to come together to ensure long-term insurance viability for such assets, such as advanced actuarial models and standardised frameworks for risk disclosure, premium pricing and loss assessment,” Khosla added. </p><p>Rising climate losses are straining insurance sustainability, with global insured property losses exceeding USD 140 billion in FY 2024–25 and India’s 2023 natural catastrophes (NAT CAT) losses reaching USD 12 billion, well above the previous decade’s average. Sub-nationally, Assam, Andhra Pradesh, Odisha, Uttarakhand, Himachal Pradesh, parts of Ladakh, Sikkim and the north-eastern states are deemed to be the most vulnerable. However, data indicates that some of the largest infrastructure projects by investment are also situated in these vulnerable regions, with the total investments amounting to Rs 2.95 lakh crores. </p><p><strong>Key Findings at a Glance</strong></p><p>● India’s infrastructure spending now exceeds 3% of GDP and is expanding rapidly in</p><p>climate-vulnerable regions.</p><p>● India’s rapidly growing insurance market reflects rising climate vulnerability, with premiums</p><p>projected to grow at 6.7% (life) and 8.3% (non-life) through 2028, according to Swiss Re</p><p>● Floods, cyclones, landslides, and extreme heat account for the majority of climate-related infrastructure losses, affecting mostly roads, coastal projects, and urban infrastructure</p><p>* Climate impacts are becoming more frequent and predictable, pushing some regions closer to the threshold of uninsurability.</p><p>● Difficulties in pricing climate risk under uncertainty may widen the gap between insured and actual losses.</p>
<p>Mumbai: As India accelerates infrastructure expansion to drive economic growth, a new report warns that rising <a href="https://www.deccanherald.com/tags/climate">climate</a> risks may be outpacing the country’s ability to insure these assets, potentially exposing governments and investors to growing financial stress.</p><p>The report, Climate Risks and Insurance for India’s Infrastructure, by Climate Trends finds that while most of India remains within the limits of insurability, insurers flagged mounting concerns around assets such as hydropower projects, highways, and urban infrastructure in high-risk regions.</p><p>2025 reinforced the dominance of hydro-meteorological events in India’s climate impacts calendar.</p>.Union govt ends vacuum, clarifies on use of environment funds.<p>The report notes that flooding, extreme rainfall, cyclones, and landslides were identified as high to very high risks for capital-intensive infrastructure such as urban assets, highways, ports, and hydropower projects, driving repeated losses and rising insurability concerns.</p><p>The study establishes that growing uncertainty due to climate impacts is making accurate risk pricing more difficult, potentially widening the protection gap between economic losses and insured coverage.</p><p>The authors spoke with several leading insurance companies of the country, like SBI General Insurance, Munich Re India, Swiss Re India, and General Insurance Corporation of India. </p><p>Aarti Khosla, Founder & Director, Climate Trends said, "As India seeks big investments at the World Economic Forum and plans double-digit (nominal) growth over the next five years, it would be remiss to not point out the risks to India's infrastructure posed by climate impacts and extreme weather events – which are unarguably increasing in frequency, severity, and geographical spread.”</p><p>“The country's rising exposure for its essential assets could thus lead to mounting climate-induced losses, which would be a fiscal and financial burden. Climate resilience must therefore be integrated into infrastructure planning from the very beginning to minimise the costs of post-disaster</p><p>reconstruction. Also, several steps will have to come together to ensure long-term insurance viability for such assets, such as advanced actuarial models and standardised frameworks for risk disclosure, premium pricing and loss assessment,” Khosla added. </p><p>Rising climate losses are straining insurance sustainability, with global insured property losses exceeding USD 140 billion in FY 2024–25 and India’s 2023 natural catastrophes (NAT CAT) losses reaching USD 12 billion, well above the previous decade’s average. Sub-nationally, Assam, Andhra Pradesh, Odisha, Uttarakhand, Himachal Pradesh, parts of Ladakh, Sikkim and the north-eastern states are deemed to be the most vulnerable. However, data indicates that some of the largest infrastructure projects by investment are also situated in these vulnerable regions, with the total investments amounting to Rs 2.95 lakh crores. </p><p><strong>Key Findings at a Glance</strong></p><p>● India’s infrastructure spending now exceeds 3% of GDP and is expanding rapidly in</p><p>climate-vulnerable regions.</p><p>● India’s rapidly growing insurance market reflects rising climate vulnerability, with premiums</p><p>projected to grow at 6.7% (life) and 8.3% (non-life) through 2028, according to Swiss Re</p><p>● Floods, cyclones, landslides, and extreme heat account for the majority of climate-related infrastructure losses, affecting mostly roads, coastal projects, and urban infrastructure</p><p>* Climate impacts are becoming more frequent and predictable, pushing some regions closer to the threshold of uninsurability.</p><p>● Difficulties in pricing climate risk under uncertainty may widen the gap between insured and actual losses.</p>