By Madalina Lavinia Preda

This year’s Climate Week in New York was not simply another gathering of policymakers, investors, and innovators. For me, it felt like a mirror — showing both how far we’ve come and how urgently we need to accelerate.

The central message was unavoidable: resilience can no longer be treated as an add-on. It must become the operating principle of how we invest, underwrite, and govern. The benefit of integrating resilience into investment, underwriting, and governance is improved risk mitigation, cost savings, and better long-term outcomes for all stakeholders.

Across The Hub Live sessions, the Opening Ceremony, and hundreds of side events echoing through Manhattan’s climate corridors, a central theme emerged: Climate risk is becoming priceable, material, and non-negotiable for investors, insurers, and governments alike. Society as a whole plays a crucial role in driving the repricing of risk, emphasizing our collective responsibility for resilience and the need for broad societal support.

I’ve been in rooms where climate was framed as tomorrow’s problem. In Manhattan this September, it was priced, measured, and debated as today’s reality. That shift is important. But it also revealed how much of our language, our systems, and even our business models are still catching up, as different stakeholders—investors, insurers, governments, and society—face distinct challenges in adapting to climate risk.

From Risk Silence to Risk Signals

AON’s data struck me most: $368 billion in total climate losses last year, with just $145 billion insured. The “protection gap” isn’t just a financial imbalance — it’s a sign that we are still underestimating and underpricing volatility.

Executives highlighted the need for risk-reflective pricing based on current climate conditions, not historical trends. There was a consensus that prevention must be treated as a strategic lever rather than a cost center. And above all, they stressed the importance of giving consumers clear, actionable tools—not just policies—so they can navigate a changing risk landscape with confidence.

“We’ve failed to educate the market on what climate risk really costs—and who’s paying for it.”

When I work with founders and insurers, I often see this disconnect. Models are becoming more sophisticated, yet education and translation remain weak points. Key risks and gaps in current risk communication and management have been identified, but stakeholders don’t just need forecasts. They need frameworks they can act on. The homeowner facing a 200% premium increase doesn’t want another slide deck on atmospheric carbon. They want clarity: what can I do, and how will the system recognize it?

This is the leap from risk silence to risk signals — not just producing better data, but making sure those signals can be understood, trusted, and acted upon.

We’re finally moving past the stage where climate risk was treated as an abstract future concern and into a reality where it’s priced, measured, and integrated into daily business decisions. What particularly strikes me is how education alone has proven insufficient.

I’ve watched countless presentations explaining climate science to stakeholders, but explanation without actionable frameworks just breeds frustration. The homeowner facing a 200% insurance increase doesn’t need another climate science lecture—they need to understand what they can actually do about their situation and how the system rewards adaptation efforts. Action at the individual level—such as investing in flood-proofing or meeting building standards—plays a critical role in managing climate risk.

Resilience as Profitability is the New Competitive Edge

One of the most striking discussions I heard this week was around infrastructure. We used to evaluate projects by asking if they reduced emissions. Now the question has shifted: what good is reduced carbon if the facility is underwater in 10 years? This shift underscores the need to assess the resilience of assets—such as infrastructure, industrial facilities, and financial holdings—against climate risk factors.

That thinking resonates with me. At Ayvens, I once watched how customer frustrations escalated when digital systems failed to adapt to the realities of local conditions. It taught me that resilience is never abstract. It’s operational, immediate, and human.

The same applies here. A data center located in a floodplain isn’t resilient, no matter how green its energy mix. A cement plant that shuts down due to heat waves is not sustainable in business terms, even if its carbon footprint improves. These examples show why resilience is not just a reputational metric. It is now a core profitability driver, and highlights how different sectors—such as technology, manufacturing, and energy—face unique challenges in adapting to climate realities. Updated building codes also play a crucial role in enhancing resilience and reducing risk for these facilities.

But there’s another layer to this communication challenge that we rarely discuss: our language is struggling to keep pace with the reality we’re experiencing. We desperately need new vocabulary to describe what we’re living through. Consider the weather terminology that has entered mainstream usage in recent years: “heat domes,” “derechos,” “haboobs,” “bomb cyclones,” and “atmospheric rivers.” These aren’t just meteorological curiosities—they represent fundamentally new risk categories that traditional models never had to price.

Capital, Climate, and Code

The most fascinating convergence I see is between capital, climate, and code. Risks must be priced in before the cheque is written.

We’re seeing a remarkable convergence in risk, regulation, and finance. Risk managers, city engineers, and institutional investors are increasingly aligned around a shared imperative: climate risk must be priced in before investment decisions are made.

Investor scrutiny has shifted from vague ESG metrics to concrete climate-adjusted forecasts. Banks and other financial institutions are rebalancing capital reserve requirements to account for new forms of exposure, as they manage climate risk and support funding for flood defenses and insurance solutions. And insurers—long seen as lagging in innovation—are rapidly becoming validators of whether a project, product, or even a policy proposal is viable.

“No one is writing the cheque until they know the risk is priced in.”

This increased scrutiny is not just about transparency; it is also about understanding the financial risks associated with climate change, which can impact capital adequacy and long-term investment returns.

After years of fragmented regulatory approaches, we’re now seeing a push for alignment between global standards and local implementation. Compliance with evolving climate risk regulations is becoming essential, as insurers and banks must demonstrate adherence to supervisory statements and integrate regulatory guidance into their risk assessments and strategic planning.

I find myself increasingly drawn to the concept of “syndicated responsibility”—the idea that we’re moving from a world where risk is something you transfer or avoid to one where it must be collectively managed and continuously adapted to. This isn’t just about climate; it’s about recognizing that in an interconnected world, isolated risk management strategies are fundamentally flawed.

Insurers need to proactively assess and manage climate and environmental risks by incorporating scenario analysis, risk-based pricing, and reinsurance strategies to adapt to new risk realities and meet evolving supervisory expectations.

Risk managers, investors, and city planners are all rethinking how they approach investment decisions in this new landscape. There is a growing need to review risk management frameworks to ensure they adequately address the challenges posed by climate change.

I call this syndicated responsibility. We are moving from a world where risks could be offloaded to one where they must be shared, managed, and continuously adapted. This is no longer optional. Climate risk cuts across supply chains, finance, and regulation — so it demands co-creation between all parties involved.

The Vocabulary Gap

Even as models improve, I’m troubled by the language we’re still using. “Heat domes,” “bomb cyclones,” and “derechos” — these words have entered the common vocabulary in the past decade, yet our industry continues to use frameworks built for 20th-century risks. The range of new risk categories and terms that have emerged in recent years highlights just how much our vocabulary must evolve to keep pace with the changing climate landscape.

And then there’s the human side: terms like “eco-anxiety” or “solastalgia” describe lived realities that actuarial tables still ignore. If I can’t adequately name a risk, I struggle to price it, communicate it, or design around it. That gap is not academic. It’s existential.

CAT Models, Coastal Protection & Real Estate Reality Checks

New York City’s Chief Climate Officer Rit Aggarwala brought the real estate sector’s vulnerability into sharp focus. His remarks underscored a fundamental risk: cities could lose their credibility faster than their coastlines if they fail to act decisively on infrastructure and insurance reform. In this context, private markets play a crucial role by providing innovative risk transfer solutions and supporting insurance reform through new products and approaches.

Traditional CAT models are proving insufficient for hyper-dense urban environments. As a result, cities like New York are launching pilot initiatives with firms like AON to develop more responsive frameworks. These go beyond conventional risk transfer—they aim to co-design financing mechanisms for proactive coastal protection and long-term urban resilience. After these pilot initiatives and frameworks, it is essential to identify opportunities for improving urban resilience and advancing climate adaptation strategies.

What gives me hope is observing how collaboration is becoming non-negotiable. Companies and industries that historically competed on proprietary risk insights are starting to realize that shared challenges require shared solutions. Climate risk doesn’t respect competitive boundaries, and neither should our response to it—or the vocabulary we use to describe it.

Projected Losses and Insurer Responsibilities

Let's face it—we're looking at $1.2 trillion in annual climate losses by the 2050s. That's not some distant nightmare we can ignore. It's happening now, and if you're in insurance, you know this isn't just another trend report. This is our wake-up call. I've been in this industry long enough to see how we handle "big shifts," and frankly, most of us are still thinking too small. We can't just sit around quantifying risks anymore—we need to get out there and actually stop disasters before they happen. That means throwing out those old models and making climate scenario analysis the backbone of everything we do, from underwriting to investments.

Here's what I've learned from watching the smart players: advanced climate scenario analysis isn't just some fancy tool—it's how you actually get ahead of physical risks and extreme weather before they crush your bottom line. The companies that get this are already building partnerships with clients to create real resilience, not just writing checks after the damage is done. And you know what? It's working. They're rebuilding trust, proving they actually care about their fiduciary duty, and finding growth opportunities that the rest of us are missing because we're stuck in reactive mode.

Want to stay competitive? Then stop treating climate change like it's a one-time problem you can solve and move on. This is the new reality, and it's not going anywhere. The insurers who understand this—who make resilience their core business instead of just another department—they're the ones who'll survive what's coming. They're protecting their clients AND building sustainable businesses that can handle whatever climate throws at us next. The question isn't whether you should take an active role in risk management. The question is: what are you waiting for?

Insurers Face Significant Challenges

Climate risk isn't just another challenge for insurers—it's the challenge that's reshaping everything we thought we knew about this business. I've watched too many firms struggle with assessing physical risks in high-risk areas, scrambling to build transition plans that actually make sense in today's wild regulatory landscape. Want to stay ahead? You've got to go all-in on climate-related financial disclosures and build risk management strategies that tackle both the fires burning today and the storms coming tomorrow.

Here's what I know works: collaboration isn't just nice to have—it's make-or-break. National governments, asset owners, pension funds? They're not sideline players anymore. They're your partners in this fight. When these stakeholders push for strong ESG performance and sustainable investing practices, they're literally helping insurers build the resilience we all need to keep competitive market share. And let me tell you—without solid research and data analysis, you're flying blind when it comes to spotting growth opportunities and reducing risks, especially in those regions getting hammered by climate events.

The insurers winning this game? They're the ones ditching the wait-and-see approach for something bold and proactive. 🚀 They're tackling mispricing risk head-on, nailing accurate risk exposure assessments, and leveraging every new technology, data source, and partnership they can get their hands on. This isn't just about supporting clients anymore—it's about strengthening entire communities and driving real sustainability across our industry.

For example, losses from wildfires have risen sharply over the past decade as rising temperatures, more frequent droughts and changing rainfall patterns converge with suburban sprawl and high-value asset concentration.

Bottom line: adapt, mitigate, and innovate now, or watch your competitors leave you in the dust. The path forward couldn't be clearer—embrace resilience, invest in research, and lead the charge in building a climate-ready insurance sector that actually works.

Syndicated Responsibility: A New Framework for Climate Risk

The term “syndicated responsibility” emerged as one of the most resonant ideas of the week. It captures the truth that while risk can be transferred, resilience must be built together.

This concept is about more than cooperation—it’s about co-creation. Startups are producing real-time climate simulations. Insurers are starting to underwrite based on adaptive behaviors. Governments are stepping in to fund open-access data portals. And consumers are finally demanding visibility—not just coverage. The benefits of shared responsibility and collective action include greater affordability, increased access, and more effective risk reduction for all stakeholders.

It’s a messy, complicated process. But it reflects a growing awareness that in the era of climate volatility, no stakeholder can operate in isolation. Disaster recovery is now recognized as a critical part of climate risk management, ensuring that communities and insurers can respond and rebuild effectively after extreme events.

I’ve come to see that the repricing of risk is about acknowledging that the world has fundamentally changed and our management systems need to catch up. We’re not just adapting to new risks; we’re learning to thrive in permanent uncertainty. Integrating environmental considerations into risk management is now essential for long-term resilience. And part of that adaptation is developing the vocabulary to name what we’re experiencing, because I’ve learned you can’t manage what you can’t clearly articulate.

The emergence of terms like “climate disaster” and “climate breakdown” in media coverage reflects this linguistic evolution, but I think we need industry-specific terminology that bridges the gap between scientific understanding and business decision-making. This (vocabulary) gap isn’t merely academic and addressing it shapes how we understand risk, how we earn trust, and how we design systems that can truly withstand the unexpected.

Repricing the Planet

One of the starkest takeaways from Climate Week is this: while modeling and forecasting tools have advanced, climate risk is still vastly underpriced. Not because we lack data—but because the systems built to interpret and apply it haven’t evolved fast enough.

Three major barriers stand out. First, there is a growing trust gap. Consumers and stakeholders often lack access to the data that influences their insurance premiums or property risk scores. Second, innovation is outpacing regulation. AI-powered climate models are becoming central to startup ecosystems, yet remain unregulated, with few guarantees of transparency or ethical use. Third, accountability is blurred. When a model misjudges a future event, who bears the consequences—the developer, the underwriter, the investor, or the insured?

"We're syndicating risk without syndicating truth.”

The trust gap in risk communication troubles me most. Risk models are becoming more sophisticated, but if they remain black boxes to the people most affected by their outcomes, we're building a system designed to fail. I believe the path forward requires not just better models, but better interfaces between technical risk assessment and human understanding—and that means developing language that makes complex risks accessible without oversimplifying them.

I left Climate Week convinced of two things:

1. Permanent uncertainty is our new baseline.

2. Our ability to articulate, price, and share risk will define whether we adapt—or fall behind.

Collaboration as Non-Negotiable

What gave me hope in New York was how often collaboration was framed as essential. Industries that once competed fiercely on proprietary insights are beginning to share data, co-design frameworks, and admit that no single actor can solve systemic risks alone.

I’ve seen the same principle in action with startups building climate and cyber solutions: the ones that succeed are the ones that involve partners early and shape trust together. Climate Week confirmed this at scale.

If you’re an insurer, investor, or founder working at the intersection of resilience and innovation, I’d love to hear: How are you building trust between your models and the people most impacted by them?

Contact us here.