What happened

Allianz Research and Allianz Trade have published the Allianz Climate Economics Report 2026, examining climate-related economic risks through growth and inflation indicators.

The report puts worldwide losses from extreme weather in 2025 at €184 billion. Although this was 32% below the 2024 figure, it remained 20% above the 2000–2019 average. Average annual losses over 2020–2025 reached €237 billion, 54% higher than in the preceding comparison period.

Insurers covered around €69 billion of the 2025 losses, equivalent to 38% of the total. That left an estimated insurance protection gap of €115 billion.

Allianz also modelled the effects of a strong El Niño across 144 economies. It estimates that such an event could cut global net output by €395 billion in 2027, or 0.24% of projected gross domestic product. China, the United States and India would account for roughly 60% of that loss.

Why it matters

For Türkiye, the report identifies a combination of high present-day climate stress and climate change conditions that diverge strongly from historical patterns. Türkiye appears alongside Nigeria, the Philippines, Malaysia, Brazil, Côte d’Ivoire and Morocco in this group. In a comparison of 52 countries, it was also among the seven with the highest economic losses from extreme weather in 2025.

The findings point to greater exposure for businesses, insurers and financial markets. More frequent or severe climate-related events can increase claims costs and affect insurance pricing. The report says countries with preparedness systems, planned funding and defined response arrangements are better positioned than those acting only after disasters occur.

For the EU, the El Niño scenario implies an estimated €21 billion reduction in net output and a 0.31 percentage-point increase in headline inflation. Globally, the model projects a 0.42 percentage-point rise in headline inflation and a 0.65 percentage-point rise in food inflation.

Background

The analysis uses the ClimRad climate data platform, developed by Allianz Research with Earthian AI. It combines climate indicators, disaster-loss data and economic modelling to assess the effects of temperature changes, heat stress and drought on growth, and the effect of temperature changes on headline and food inflation.

What's next

Allianz plans to issue the report annually. Its 2027 scenario underlines the potential economic and inflation effects if a strong El Niño develops.