The UK’s Climate Change Committee warned that rising flood, heat and infrastructure risks could widen the country’s insurance protection gap unless insurers, regulators and government accelerate climate adaptation measures.
In its latest independent climate risk assessment, A Well-Adapted UK, the Climate Change Committee (CCC) said climate impacts are already affecting the economy, households and the financial system, while existing adaptation efforts are not keeping pace with the scale of risk.
The report stated that “from now through to 2050, the UK insurance protection gap should not grow due to climate change”. It also warned that adaptation actions need to ensure that “residual risks can still be insured, underpinning the property market and wider economy”.
The CCC said annual flood damage currently stands at £3.3 billion and could rise to £4.5 billion by 2050 under a 2°C global warming scenario if further action is not taken. The number of properties exposed to flood risk could increase by up to 40%, with nearly seven million properties already located in flood-risk areas across the UK.
The committee warned that climate risks are interconnected across property, infrastructure, supply chains, labour productivity and life and health exposures. It said insurers would need to assess climate impacts beyond single hazards due to the potential for disruption across multiple systems.
The report identified flood risk, extreme heat and infrastructure disruption among the most urgent areas requiring adaptation measures.
The findings come alongside the Prudential Regulation Authority’s updated SS5/25 supervisory expectations, which require insurers and financial firms to improve governance, scenario analysis and climate risk management frameworks.
Cormac Bradley, senior actuarial director at Broadstone, said the report demonstrated a transition from climate risk awareness to operational readiness.
“This report marks an important shift from climate risk awareness to climate risk readiness. As Parliament’s independent climate advisers, the CCC is clear that climate impacts are already affecting the economy and financial system,” said Bradley.
“For insurers, this provides a strong evidence base to identify what is genuinely material and to strengthen climate risk frameworks in line with the PRA’s SS5/25 expectations. The message is no longer about future risk, it is about how firms are managing climate risk today,” he added.
The CCC estimated that around £11 billion a year in public and private investment will be needed for adaptation measures, with a range of £7 billion to £22 billion at 2025 prices. It said investment requirements are likely to be divided roughly equally between the public and private sectors.
By the middle of the century, 92% of existing homes could overheat during heatwaves, while peak river flows could increase by up to 45%. Water supply shortfalls may exceed five billion litres per day during drier summers.
The CCC said the UK should prepare for weather extremes linked to 2°C global warming by 2050, while adaptation planning for long-life assets should also consider the possibility of 4°C warming by 2100.
Hotter summers recorded in 2018, 2022 and 2025 could become normal conditions by 2050. Heatwaves above 40°C may occur regularly in southern England, while temperatures exceeding 45°C could also become possible.
The committee also warned that heavy rainfall intensity could rise by 15% to 60% compared with the late 20th century, increasing flash flooding and infrastructure disruption risks. Sea levels around UK coasts could rise by 20 cm to 45 cm, increasing the frequency and severity of coastal flooding and erosion.
Recent weather events across the UK, including the summer of 2022 when temperatures exceeded 40°C and more than 3,000 early deaths were recorded in England and Wales during heatwaves.
The report also referred to the winter of 2023-2024, the wettest October-to-March period on record for the UK, which displaced thousands of people through prolonged flooding and contributed to the second-lowest arable harvest recorded.
2025 became the UK’s hottest year on record, with more than 40,000 hectares burned during the country’s largest recorded wildfire season.
