The Sink or Swim Project

My family has been in the insurance and risk management business here in South Florida for over a century, starting in 1910 with my great-grandfather, and continuing through my father’s recent retirement in 2023. If there’s one thing I’ve learned from my family after three generations in that industry, it’s that the business of predicting and managing risk is a serious, typically conservative one in which it’s critical that the perils, as they are called, that cause losses to take place are skillfully understood. Misunderstanding or miscalculating risks from perils such as flooding, windstorm, or extreme heat, for example, can be the difference between whether insurers and the enterprises they protect are profitable or, for that matter, stay in business.

For these reasons, the 18th Annual Emerging Risk Survey from the Casualty Actuarial Society and the Society of Actuaries again caught my attention as respondents ranked climate change as the number one emerging risk that concerns them. At a time when Earth’s rising temperatures and the resulting problems they cause are often sadly politicized or diminished in alarmingly shortsighted ways, the serious folks who actually analyze risk (actuaries); seek ways to mitigate, avoid, and manage it (risk managers); and financially protect others from those risks (insurers and reinsurers) understand that our climate change crisis is real and that its growing worse.

Here are the top five Emerging Risks:

1. Climate Change & 2. War, including civil wars (Tie)

3. Disruptive technology

4. Cyber/network security

5. Demographic shift

“Risk manager concerns in the current survey focus on climate, disruptive technology, and wars, continuing previous years’ trends. Artificial intelligence (AI) risks were also surveyed, with concern mainly on cybersecurity and manipulation, and many departments within companies being involved in managing components of these AI risks.”
Executive Summary / Key Findings, 18th Annual Survey of Emerging Risks (01/2025)
Society of Actuaries Research Institute

The survey asks respondents to select their top concerns from 23 different risks and asks risk managers to rank both current and emerging risks. It uses four categories to then measure and rank various risks: top current risk, the leading five emerging risks, overall emerging risk, and emerging risk combinations. This year’s survey included responses from 201 participants, 95% of whom were based in North America, as well as folks from Africa, Asia, Bermuda, the Caribbean, and Europe.

Climate change has been ranked the number one emerging risk each year since 2021, including in the most recent survey in which it shares the top spot with worries over war. Here is the summary of responses related to climate change as an emerging risk, followed by the recent report’s notes related to climate change:

• The green arrows capture the general trend, based on the emerging risk response (light blue bars), and show a slight dip from previous highs, but remains as a top emerging risk. Note that the 2024 midyear and 2023 midyear numbers are slightly out of trend as these are based on the flash survey results, a lighter version of the survey conducted in May and not the full survey conducted in November.
• The current risk in dark blue shows a similar trend, slight dip from recent history but remains high. Note that Climate change is the third current risk after Wars (including civil wars) and Financial volatility.
• Climate change is chosen frequently when the respondents are picking their top five risks, red bars, but also a slight dip compared with historical trends. Note that Climate change is the most popular choice, tied with Wars (including civil wars).
• Remaining elevated after a slight decrease is the trend shown by the yellow bars, representing the relative number of times Climate change has been selected in risk combinations. This risk is one of the most selected within these combinations, just after Wars and Financial volatility. Note that the mid-year flash surveys do not ask for combination of risk, thus present no yellow bars.

For a decade now, I’ve been saying that the time has come to set politics aside and face the reality of our warming climate and the resulting risks it presents to our environment and society. If those professional people charged with the serious business of predicting, managing, and protecting against those risks keep ranking our climate crisis as their top concern, shouldn’t the rest of us?

To read the entire SPA Research Institute report, including prior years’ editions, please click here.