Asia experiences the highest protection gap - the proportion of total economic losses that is uninsured - for weather-related extremes according to a new report by the global association of insurers Geneva Association (GA).
The report reveals that various factors, including low risk awareness, reliance on post-disaster government aid, misperception of risk, a lack of financial education and poor risk management culture, contribute to this protection gap in Asia.
The new 68-page report Safeguarding Home Insurance: Reducing exposure and vulnerability to extreme weather released in May 2025 reveals that while insured losses from extreme weather events have exceeded $100bn every year since 2020, a staggering proportion of the damage remains uncovered.
The protection gap exposes profound vulnerabilities, especially in regions like Asia and Africa where insurance penetration remains limited. Meanwhile, in the absence of risk-based pricing, concerns around the availability and affordability of property insurance are mounting even in advanced economies. On average, North America and Oceania and Australia have the lowest protection gap.
The increasing global losses are not only due to climate-change-driven weather events, but also to how and where we build – often in hazard-prone areas, with outdated codes and approaches that weaken natural buffers. The report finds that combined with the rising costs of rebuilding due to inflation, these factors could push insurance affordability to a tipping point in some regions.
Based on in-depth analysis of housing sectors in Australia, Japan, Canada, the EU and the US, the report identifies two tiers of action: 1) scaling proven, incentives-based local resilience strategies, and 2) implementing structural reforms, particularly in mortgage systems, and incorporating resilience in credit ratings.
It calls for an all-of-society effort – emphasising the roles of homeowners, lenders, governments, and regulators, alongside (re)insurers – to act in the face of intensifying weather extremes. Risk-based insurance pricing incentivises the measures needed to mitigate the risk of property damage and preserve home insurance as a reliable safety net.
Geneva Association MD Jad Ariss said, “Extreme weather is no longer a future threat – it’s disrupting lives and businesses today. But we’re not powerless. By urgently investing in stronger local building standards, nature-based solutions, and climate-resilient infrastructure, we can protect people and property and keep home insurance available and affordable.
He said, “Resilience is achievable when governments, communities, and insurers work together. The cost of inaction will far outweigh the amount of investment needed.”
GA director climate change and environment Maryam Golnaraghi said, We need to scale up targeted, local-resilience measures: retrofitting vulnerable homes and critical infrastructure; enforcing risk-based land zoning and updated building codes; and structural reforms in property-valuation and mortgage-lending systems linked to insurance markets. These changes – combined with mandatory hazard disclosures and resilience-based financial incentives – can lead to behavioural changes to reduce exposure and vulnerability and keep insurance available and affordable.”