The response of the private sector is key to understanding how economic systems react to ecological pressure. This thesis focuses on how insurance arrangements will affect and be influenced by climate change. In theory, insurance arrangements provide a long-term outlook. Thus, there is a hypothesis that insurers will act to control the risk of climate change.

This thesis reviews reasons why insurer’s outlook in often short term. I argue that the structure of insurance arrangements limits a response to climate change. However, since 1989, the catastrophe market has changed from an industry unconcerned with underlying risk processes. This is a positive development since interest in risk processes in a prerequisite for a proactive response to climate change.