The move to a sustainable energy future may be thrown into doubt by insurers’ hesitation to change the products they deliver.

The warning came as experts from the insurance, investment and sustainable finance communities gathered in London for the  Sustainable Finance in Action: Insurance seminar.

The seminar organised by Guernsey Finance explored how insurance is evolving beyond traditional risk transfer to support resilience, stability and long‑term sustainable outcomes.

Focused on the theme: “Risk to resilience: the role of insurance in sustainable finance”, the event examined how systemic change is challenging traditional insurance mechanisms and creating new demands for innovative, financeable solutions.

Discussions highlighted the need to adapt established insurance structures so they remain effective in managing emerging risks, whilst continuing to mobilise capital in support of the transition.

In a global economy shaped by volatility and complexity, the need for insurance to act as a forward-looking resilience strategy, rather than a reactive payout mechanism, emerged as a core theme, as delegates considered the hurdles to a shift of a sustainable future.

Gus Majed, CEO and founder of Paratus, the world’s first reinsurer underwriting energy price risk to support the transition to net zero, opened the event with a keynote address. Drawing on Paratus’ experience in structuring climate and disaster risk solutions, he warned that “hesitation is paralysis”, and said failure to adapt insurance mechanisms would risk leaving critical exposures unaddressed.

He added: “What we are seeing is a genuine change and breakdown of the order that has been governing the energy markets. I would say, geopolitical fragmentation since the 1970s – the institutional architecture itself has begun to unwind in real time, and that is starting to create systematic risk.”

Against this backdrop, Majed stressed the importance of re‑positioning insurance as a tool for resilience rather than purely response.

He continued: “Being able to price risk and create resilience is paramount, and to have insurance as less of a backward-looking protection, but rather, more than anything, enable [insurers] for growth and development.”

Mike Pickard, director, Global (Re) Insurance / ILS Management at Aon, said: “We’re connecting this to capital using existing techniques, using existing structures and solutions. We are just applying to different risks and trying to find solutions to the problems.”

One solution discussed was the use of captive insurance structures to incubate emerging risks that might otherwise be considered uninsurable or prohibitively expensive, allowing models to be tested and insurance to be placed within established frameworks.

Matthew Wheeler, director, Climate Risk Advisory, pointed to the widening protection gap in markets where risks are escalating fastest.

He said: “As the risks increase, as they become more acute and concentrated in certain areas, we know, for example, in Asia, some of the risks are increasing significantly, and those are the countries who also cannot support the financial protection that is needed. And so, I think it is working with government, figuring out the right mechanisms to make capital as affordable as possible.

“Maybe there is an argument to be made for if we all pool the risk together, and those who need it most can still get it at an affordable price, and we all pay a little bit more as a society in order to help those setting up those mechanisms in a profitable way.”

The need to balance innovation with risk appetite was echoed by Raveem Ismail, founder of Trigger Parametric, who discussed the challenges of attracting capital when risk profiles are perceived as unstable.

He said: “The trouble is that risk capital sometimes suspects that the domain isn’t static, and when that’s the case, we become very conservative… so we have to find creative ways which don’t become pure volatility, but also include some of the infrastructure that are available to solve these problems.”

Stephanie Glover, director of strategy and Sustainable Finance, concluded: “For many years, much of the conversation around risk has understandably focused on response – how we respond to an event, how we absorb losses, how we recover from disruption once it has already happened. But if our approach to climate risk is primarily reactive, then we are always one step behind the problem.”