Insurance companies are making record profits off climate change panic, not facts

The headlines are relentless, loudly proclaiming that ­climate-fueled extreme weather has caused an insurance crisis, reflected in dramatic rate increases for homeowners and businesses.Some warn that total economic collapse may soon follow.But as is often the case when it comes to apocalyptic warnings related to climate change, real-world data doesn’t support the narrative.In reality, the insurance industry, which provides coverage related to hurricanes, fires and other extreme events, is enjoying a streak of record profits.Defenders of high premiums say it’s because it’s much more expensive to insure homes because of climate change.But the recent spike in insurance prices is much more likely due, in significant part, to political requirements across the industry that financial companies consider “climate risk,” and the corresponding suite of risk modelers established to meet the newly ­created demand.In 2009, Warren Buffett of Berkshire Hathaway explained how property/casualty insurers made money: “Insurers receive premiums upfront and pay claims later.” The accumulated premiums, which Buffett called “float,” result in a pile of money that companies invest to earn profits.Buffett explained that because of vigorous competition among insurance companies, most do not make money from underwriting, they just seek to break even so they can then capitalize on the “float.”That was then.In 2024 and 2025, insurance companies made significant profits from underwriting alone.

According to the National Association of Insurance Commissioners (NAIC) in a report covering the first six months of 2025, “Despite heavy catastrophe losses, including the costliest wildfires on record, the US Property & Casualty (P&C) industry recorded its best midyear underwriting gain in nearly 20 years.”In the second half of 2025, things got even better, thanks in large part to hurricanes missing the United States for the first time in a decade.S&P Market Intel...