The insurance–bank nexus: the climate protection gap as a source of risk for the financial system

Martina Menegat and Morgan Després

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: From a banking perspective, the climate insurance protection gap is broader than its traditional insurance-focused definition. As physical climate risks intensify, banks can be materially affected through unavailable or inadequate insurance coverage, with potential impacts on financial stability. Such risks include slow-onset changes, acute hazards and related indirect damage. This policy insight examines the impacts of the insurance protection gap on the banking sector, focusing on property and casualty insurance at the global level.

JEL-codes: F3 G3 N0 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2026-06
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