TED Talks Daily
Amy Barnes: Will climate change make your home uninsurable? | TED Countdown Summit 2025
15 Sep 2025
Insurance is the hidden engine that keeps the economy churning, but climate change is making home insurance unaffordable for many people, says climate risk advisor Amy Barnes. She reveals why soaring premiums aren't just bad news for homeowners, but also a flashing red signal for the global financial system — and why investing in resilience now could change everything.For a chance to give your own TED Talk, fill out the Idea Search Application: ted.com/ideasearch.Interested in learning more about upcoming TED events? Follow these links:TEDNext: ted.com/futureyouTEDSports: ted.com/sportsTEDAI Vienna: ted.com/ai-viennaTEDAI San Francisco: ted.com/ai-sf Hosted on Acast. See acast.com/privacy for more information.
Full Episode
You're listening to TED Talks Daily, where we bring you new ideas to spark your curiosity every day. I'm your host, Elise Hu. When the wildfires broke out in Los Angeles, California earlier this year, reports started coming out about insurance companies pulling back coverage from the people who needed it most.
This trend is only expected to increase as companies try to remove as much risk as possible. In her talk, climate risk advisor Amy Barnes explains why we need to reframe risk insurance as a warning bell. She says adaptation and smarter tools can help us get ahead of disasters and invest in resilience before it's too late.
When I first joined the insurance industry, I realized that telling people about it was the fastest way for them to lose interest. Fortunately, that's changed. Risk is so much higher on people's personal and professional agendas. We know that it pays to manage risk.
In my industry, our ability to price risk means that we have tools and products that can give a signal as to how we might adapt to climate change. So when I joined this industry, I knew nothing about it. But in my first week, I learned its role in a modern economy. Aeroplanes wouldn't fly, surgeons wouldn't operate, and Taylor Swift would not go on tour without access to insurance.
In fact, very few people will take on a major financial commitment without it. It works because the losses of the few are paid for by the many, making risks manageable. And so banks rely on insurance, and if anyone here has built a wind farm or bought a home, the banks will have required you to have insurance in place.
In fact, many, maybe even most financial transactions are contingent on insurance being in place. And so insurance is the lubricant of the financial services industry, and without insurance, you'll struggle to access debt. Last bit of the insurance lesson, I promise. Premiums price risk.
So the cost of the insurance gives an indication of how likely it is that the insurer thinks that you will suffer a loss. And we all know this. Young, inexperienced drivers pay high insurance premiums. Yet on my home, if I install a burger alarm or locks on my windows, I know the cost will be lower.
So the premium indicates how likely it is you will suffer a loss, but there are things that we can do to reduce the risk and reduce the cost. So what's any of this got to do with climate change? Well, importantly, insurance only works while extreme weather remains a risk. If it becomes a near certainty, insurance becomes unaffordable and potentially not available.
So we have an industry whose core competency is pricing risk, telling us that in places, the cost of risk is too high for people to pay. And at the same time, we have a financial services industry that relies on insurance to provide loans, which in turn make the financial system work. Now, the signals are really clear.
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