Climate overshoot and the insurability frontier: peak stress, domestic capacity, and market retreat risk

Architesh Panda

Climate overshoot can create mid-century peaks in climate stress before end-century temperatures stabilize, but its implications for insurance availability remain poorly understood. We assess subnational insurance market exit risk under overshoot across 1,590 first-order administrative regions in 88 countries, covering 4.54 billion people. Combining ADM1-level multi-hazard climate stress, an eight-model SSP5-3.4-OS overshoot signal and a country-level domestic capacity index, we identify where overshoot-adjusted risk pressure approaches an insurability boundary. Relative to baseline climate stress, overshoot increases risk pressure in 75.9% of regions and exposes an additional 59 million people to high uninsurability risk. Six regions, five in Sudan and one in Bangladesh, meet the strict boundary-zone condition of extreme risk pressure and very low capacity. A wider near-boundary frontier contains 87 regions and 561 million people, while a capacity threshold near 0.40 separates buffered from vulnerable systems. These results show that overshoot affects insurance-relevant risk through the timing of peak stress, making pre-emptive climate financing and capacity-building central to preserving insurability and limiting wider climate-financial instability.