Experts issue warning on looming threat that could wipe out billions in property value: 'The new baseline'

Financial experts are warning that increasingly severe weather is putting homes, businesses, and entire communities at risk — with the potential to erase billions of dollars in property value and drive up insurance costs for everyday people.

According to a Bloomberg report, major investment firms are now treating floods, wildfires, heat waves, and storms as immediate threats to housing and infrastructure, rather than distant risks, as damage continues to mount worldwide.

What's happening?

Apollo Global Management is changing how it evaluates investments to better reflect how extreme weather can affect homes, buildings, and infrastructure, Bloomberg reported. Instead of relying on broad forecasts, the firm is now taking a closer look at individual properties and projects before making deals.

"Climate-driven disruptions can directly impact operating costs, supply chains, and insurance markets," Jaycee Pribulsky, Apollo's chief sustainability officer, told Bloomberg, making financial risks "more immediate."

The shift comes as losses mount. Swiss Re estimated that natural catastrophes caused $107 billion in global insured losses last year, with total economic losses reaching $220 billion. "Elevated natural catastrophe losses are no longer outliers but the new baseline," Monica Ningen, Swiss Re's U.S. Property and Casualty CEO, said in a statement.

Why is this concerning?

As major financial institutions reassess the risks posed by extreme weather, its effects can quickly ripple through to homeowners and businesses. When floods, wildfires, or storms hit, property values can drop dramatically in a short period of time. Higher insurance premiums, reduced coverage, and, in some cases, the inability to secure insurance at all can make homes and businesses far less valuable — or leave owners unable to rebuild or sell at all.

Recent wildfires in Southern California show how quickly these risks can become financial realities. Fires that tore through areas such as Malibu destroyed thousands of homes, erasing billions of dollars in property value and leaving some once-multimillion-dollar properties reduced to vacant lots worth far less.

These impacts don't stop at financial losses. Severe weather endangers lives, disrupts communities, and threatens economic stability. Damaged infrastructure can shut down businesses, displace residents, and strain emergency services, leaving entire regions more vulnerable.

What's being done about it?

Investment firms are embedding weather risk into dealmaking, while insurers and lenders are adjusting coverage and pricing to reflect rising losses.

For individuals and communities, paying closer attention to how extreme weather affects property values, insurance access, and local infrastructure is becoming increasingly important — especially in areas already prone to floods, fires, or storms.

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