Damaged furniture in front of a flooded home in Texas after Hurricane Harvey.
Credit: Justin Sullivan

There’s no balancing this ledger.

Insurance companies face greater dangers from climate change, including weather-related catastrophes and court fights, than they do silver linings, according to a report released today by Moody’s Investors Service, the ratings agency.

From payouts after a hurricane, flood or other disaster to lawsuits that could wrap them up in costly litigation, insurers and reinsurers are severely exposed to the perils of climate change, Moody’s said.

“We felt on balance that it was a net negative impact,” said James Eck, the lead author. “There’s a lot of areas where they could be exposed.”

A draft of the report shows insurance losses—from cyclones, storms, floods, extreme temperatures, droughts and fires—have risen in recent decades as natural disasters have grown more common.

The insurance industry is among the most exposed sectors of the global economy to the effects of climate change, and those risks could grow as coastal cities expand.

In a statement, David Kodama, assistant vice president of research […]