Climate Change: Housing Insurability, Mortgage Lending and Financial Resilience

Earl Russell Excerpts

Monday 13th July 2026 Lords Chamber

[Lord Livermore (Lab)]

With the greatest respect, I think it might be both. We have to adapt and take long-term action to get down to net zero, as the right reverend Prelate says. I agree on both points.

[Earl Russell (LD)]

My Lords, once we reach three degrees of warming, no one can take on the risks, so there will be no more insurance and:

“The financial sector as we know it ceases to function”.


Those are the conclusions of Günther Thallinger of Allianz, who warns that Governments will be unable to backstop the resulting losses. Given this stark warning, what discussions have taken place with the Prudential Regulation Authority on the systemic financial stability risks of climate-driven insurance withdrawal?

[Lord Livermore (Lab)]

I am grateful to the noble Earl for his support for many of the Government’s measures in this area. As he knows, the Financial Policy Committee is responsible for identifying, monitoring and taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system. The Government’s remit to the committee makes clear that it should continue to regard the risks arising from climate change as relevant to its primary objective. The Bank of England’s December 2025 financial stability report set out the committee’s assessment of climate-related risk to UK financial stability, which is that it is low relative to other countries in the shorter term.