Insurance leaders are facing new risks and expectations. Climate extremes, sustainability mandates, and shifting customer demands require more than incremental change. 

With natural disasters becoming more frequent and severe, insurers are grappling with mounting claims and escalating risks. In 2024 alone, global natural catastrophe losses totaled $320 billion, yet only $140 billion of those were insured (the third-most expensive year since 1980).

This growing protection gap underscores the urgent need for innovative, sustainability-aligned insurance solutions.

Commercial clients must now disclose ESG impacts and improve risk strategies. Insurers support this with policies that drive carbon reduction and sustainability, meeting regulations and helping clients prepare for the future.

Millennials and Gen Z prefer brands that reflect their climate values. Insurers offering green products, from EV discounts to solar incentives, gain a competitive edge and boost customer loyalty.

Leading insurers are moving forward by adopting new technologies and partnering with startups. Here is how innovation managers and executives can take action.

Parametric insurance and real-time climate risk modeling

Parametric insurance uses objective triggers like wind speed, rainfall, or flood depth to pay claims based on data from sensors and satellites. This approach delivers certainty, speed, and transparency. Businesses, renewable energy projects, agriculture, and public sector entities now use parametric covers to manage climate-related exposures.

Descartes Underwriting and FloodFlash have introduced flood and catastrophe cover that pay as soon as a threshold is reached. Allianz and Swiss Re are scaling these solutions for farmers and municipalities across Latin America and Africa. According to Allianz, its crop parametric insurance in Colombia now protects over $1.5 million in investments and 390 hectares across 45 municipalities. Swiss Re’s agriculture parametric programs now cover more than 250,000 small farmers in Uganda.

AI, satellite data, and advanced analytics for underwriting

Traditional insurance models cannot address today’s climate volatility. AI and machine learning now support risk modeling with real-time weather, satellite, and geospatial data. Startups such as Previsico and Zesty.ai provide hyper-local risk models for flood and wildfire that allow underwriters to price accurately and help clients mitigate losses.

Swiss Re embeds AI in its catastrophe risk models to support property underwriting and claims management. These approaches enable insurers to select and price risk more effectively and support better resilience strategies for clients.

Blockchain, smart contracts, and embedded insurance

Blockchain and smart contracts provide transparency and automate claims. The Lemonade Crypto Climate Coalition, a DAO supported by the Lemonade Foundation, brings together leading blockchain and insurance organizations to create affordable, automated weather insurance for vulnerable smallholder farmers in Africa, using blockchain technology, area yield indices, and decentralized funding to address challenges of risk quantification, claims automation, and reinsurance. Almost 7,000 smallholder farmers in Kenya are now safeguarded by the Lemonade Crypto Climate Coalition. Payouts are triggered automatically by drought data, with no manual claims process.

Embedded insurance brings coverage directly into products such as solar panels and electric vehicles. SolarInsure provides 10-30 year insurance-backed warranties bundled with new residential solar systems. Tesla and other manufacturers now include insurance with vehicle sales. These models increase coverage rates and improve customer confidence.

B2B startup-driven innovation and collaboration

Insurers turn to specialized startups for technology, data, and new risk-sharing models. Energetic Capital provides credit insurance solutions that enable more capital and energy projects to move forward by de-risking transactions and unlocking financing at scale. Their offerings are backed by top-rated (S&P A+) insurers, giving clients the confidence and certainty needed to optimize project financing in sectors like renewables and infrastructure. 

Kita insures carbon credit delivery, supporting carbon removal projects and investor confidence. 

IBISA provides small-scale farmers with climate microinsurance, using satellite-driven parametric policies that offer low-cost premiums and fast claims payments.

SOSA’s network includes B2B-focused insurtechs ready to partner as white-label MGAs, data vendors, and risk partners. Innovation teams can launch pilots that align with sustainability targets and business priorities.

Case studies: Incumbent strategies and results

Allianz:

• Allianz’s parametric insurance for small farmers in Colombia uses satellite-monitored rainfall triggers. The policy covers 390 hectares and more than $1.5 million of crops, providing a safety net in a region where fewer than 3% of farmers previously had insurance.
  
  
• In Côte d’Ivoire, Allianz’s drought insurance for cocoa farmers uses the European Space Agency’s soil moisture index. By early 2023, Allianz had sold over 1,000 index policies to cocoa farmers.‍

Read more from Allianz’s press release

AXA:

• AXA Climate insures 88 Marine Protected Areas in the Philippines, protecting 90,000 hectares of coral reefs and the livelihoods of 12,000 local fishermen. After a cyclone, the policy pays out for reef restoration and community recovery. This is a first-of-its-kind insurance product for ecosystem assets.
  Details from Reinsurance News 

• AXA Climate and ClimateSeed are partnering to help companies accelerate decarbonization and adapt to climate change. By combining AXA’s expertise in emissions measurement and reduction with ClimateSeed’s digital platform, the partnership offers comprehensive solutions for carbon footprint analysis, emissions reduction, and access to carbon projects, supporting clients’ climate goals and regulatory needs.

Read more from AXA

Swiss Re:

• Swiss Re supports the Uganda Agriculture Insurance Scheme, now covering more than 250,000 small farmers. The scheme uses parametric and multi-peril crop insurance, backed by government premium subsidies and Swiss Re reinsurance.
  
  
• Swiss Re also covers renewable energy projects and partners on public-private risk pools globally.‍

Swiss Re’s agricultural parametric product details 

Sompo:

• Sompo has partnered with Israeli startup Momentick to reduce greenhouse gas emissions from Japanese energy sources, including rigs and gas pipelines. 
• Momentick’s satellite-based technology enables precise detection and measurement of methane emissions, and the collaboration will explore integrating these capabilities into Sompo’s risk management services, supporting both regulatory compliance and the development of new insurance products focused on environmental impact. Globes

Tokio Marine Kiln

• Tokio Marine Kiln (TMK) partnered with insurtech Altelium to launch the world's first data-driven warranty program for Battery Energy Storage Systems (BESS). This initiative aims to accelerate the adoption of renewable energy by providing insured warranties that mitigate risks associated with battery performance and manufacturer insolvency.

Details from Reinsurance News

Green insurance is central to insurance portfolios and climate commitments. Executives who combine technology, partnerships, and a sustainability focus are unlocking new growth and building resilience for customers and the business.

Explore how technology and InsurTech partnerships can accelerate your sustainability and innovation goals. Connect with SOSA to discover and scale the latest green insurance solutions for your business.