The U.S. Department of Energy released a controversial climate report Tuesday that challenges fundamental assumptions underlying insurance risk assessments and climate modeling, arguing that widely-used predictions of extreme weather events are based on flawed science and overstated scenarios.
The 151-page report, titled A Critical Review of Impacts of Greenhouse Gas Emissions on the U.S. Climate says that "most extreme weather events in the U.S. do not show long-term trends" and that "claims of increased frequency or intensity of hurricanes, tornadoes, floods, and droughts are not supported by U.S. historical data."
The timing of the DOE climate report creates an interesting juxtaposition with current insurance industry data. While the federal report questions the reliability of extreme weather projections, Swiss Re's latest analysis released earlier this year shows global insured losses from natural catastrophes reached $137 billion in 2024, with the reinsurance giant projecting losses will continue following a "5-7% annual growth rate (in real terms) that has been the norm of recent years."
The Swiss Re report notes that "global insurance losses from natural catastrophes continue to follow" this upward trend, estimating insured losses "will approach USD 145 billion in 2025." This persistent growth in catastrophe losses, driven by hurricanes Helene and Milton, severe convective storms, and large-scale urban floods, suggests the insurance industry continues to operate under assumptions about increasing climate risks that the DOE report now challenges, creating a potential disconnect between federal climate assessments and the financial models that insurance companies use to price risk and allocate capital.
The DOE’s report's implications for the insurance sector are significant, as the industry has increasingly relied on climate projections showing escalating extreme weather risks to justify premium increases and coverage restrictions.
Major insurers have cited rising hurricane intensity, increased wildfire frequency, and accelerating sea level rise as key factors driving up costs and reducing coverage availability in vulnerable areas.
However, the Energy Department's working group argues that such projections are built on unstable foundations.
"The world's several dozen global climate models offer little guidance on how much the climate responds to elevated CO2, with the average surface warming under a doubling of the CO2 concentration ranging from 1.8°C to 5.7°C," the report states.
This enormous range of uncertainty, the authors suggest, undermines confidence in specific predictions about future extreme weather patterns.
The report particularly challenges assumptions about sea level rise acceleration that inform coastal insurance risk models.
While acknowledging that "global sea level has risen approximately 8 inches since 1900," the report argues there are "significant regional variations driven primarily by local land subsidence" and that "U.S. tide gauge measurements in aggregate show no obvious acceleration in sea level rise beyond the historical average rate."
The Energy Department commissioned the report from five prominent climate science skeptics, including physicist Steven E. Koonin, atmospheric scientist John Christy, and climatologist Judith Curry.
But mainstream climate scientists have sharply criticized the report's methodology and conclusions. Zeke Hausfather, a climate scientist at Berkeley Earth, called the document a "scattershot collection of oft-debunked skeptic claims" that "are not representative of broader climate science research findings," according to The New York Times.
The Environmental Protection Agency cited the Energy Department's findings this week in its proposal to repeal the 2009 "endangerment finding" that classified greenhouse gases as threats to public health—a determination that underpins federal authority to regulate emissions.
