50% GDP Collapse Ahead? Actuaries Sound The Alarm—Who’s Listening?

A Financial Reckoning Is Coming—and We Are Not Prepared

For decades, climate scientists have warned us about the dangers of rising temperatures, extreme weather, and ecological breakdown. Now, the actuaries, the professionals who calculate financial risk, are sounding the alarm. Their latest report projects a stunning 50% collapse in global GDP within decades if climate change remains unchecked. This is not a typical recession or economic downturn; it is economic devastation on a scale humanity has never experienced. Entire industries could crumble, pensions could vanish, and insurance could become unaffordable. The financial foundation of modern life is at risk, yet mainstream economic forecasts still cling to the assumption of “business as usual.” Why is this the case?

Actuaries: The Unlikely Voices of Financial Doom

Actuaries are among the most conservative and data-driven financial professionals in the world. Their calculations underpin trillions of dollars in insurance pricing, pension fund allocations, and investment decisions. If they are warning of an impending financial catastrophe, why isn’t the broader economic community taking it seriously? According to a new report by the Institute and Faculty of Actuaries (IFoA) in collaboration with the University of Exeter, global GDP could contract by 50% between 2070 and 2090 if climate change remains unchecked. This is not an abstract environmental warning; it is a projection based on rigorous financial risk assessments. The report, titled Planetary Solvency – Finding Our Balance with Nature, makes a stark declaration: “The risk of Planetary Insolvency looms unless we act decisively. Without immediate policy action to change course, catastrophic or extreme impacts are eminently plausible, which could threaten future prosperity.”

Why Are Economists Ignoring Actuaries’ Warnings?

Despite these alarming findings, most economic models still fail to integrate climate-driven shocks into their long-term forecasts. There are several reasons for this disconnect. First, traditional economic models underestimate the severity of extreme events. Many macroeconomic models assume a gradual warming scenario rather than abrupt, compounding crises. For example, the widely used DICE model, developed by Nobel laureate William Nordhaus, predicts only a modest percentage drop in GDP per degree of warming. In stark contrast, actuaries use probability distributions that account for high-risk, low-probability events such as extreme weather, supply chain disruptions, and mass migration.

Second, mainstream economic forecasts often employ short-term thinking, discounting future risks. This means that the financial impact of climate disasters is given less weight in present-day decision-making. Actuarial models, on the other hand, look decades ahead, reflecting the long-term liabilities of pension funds, sovereign wealth funds, and infrastructure investments. Third, economists often rely on historical growth trends, assuming cyclical downturns followed by recoveries. However, climate-driven GDP shocks will not behave like past recessions. Instead, they could lead to permanent economic contraction in vulnerable regions and industries.

A Grim Outlook for Today’s 25-Year-Old

To grasp the significance of a 50% decline in global GDP, consider someone who is 25 years old in 2025. By 2070, this individual will be 70 years old—precisely when the IFoA projects the deepest economic impacts could materialize. Here’s how that might play out: Retirement savings could collapse. Even well-managed pensions face severe headwinds when the broader economy craters. Governments, weighed down by disaster relief and falling tax revenue, may reduce social security benefits or raise retirement ages significantly. Private pension funds that once relied on steady market growth could be forced to cut back payouts or go insolvent, leaving retirees with only a fraction of the retirement income they anticipated—even if they’d built substantial savings.

Homeownership could become fraught with uncertainty. If you purchased property in a vulnerable region, there’s a real chance your insurance premiums skyrocketed or coverage was outright revoked. Property values may have collapsed, trapping you with an asset you can’t sell. Even homeowners in safer areas can be forced to move if soaring insurance premiums, higher property taxes, and recurring climate-related damage make staying put unaffordable. Not even wealth guarantees stability if your equity erodes faster than you can adapt—or if entire neighborhoods become uninsurable.

Employment prospects could also dim, even for retirees. By your 70s, you might need to keep working because of eroded pensions and ballooning living costs. Yet a decades-long GDP decline devastates business investment and stifles new ventures. Entire industries may relocate or fail outright due to repeated climate shocks, leaving your hard-earned skill set underutilized or obsolete. Older workers who can’t afford to retire compete with younger job seekers in an already stagnant market. Wages remain suppressed, underemployment is widespread, and the prospect of finding meaningful, well-paid work becomes increasingly remote. Even the wealthiest can lose significant capital if real estate, stocks, and business ventures go sour together.

Social Turmoil and Health Risks

The societal impacts of a 50% GDP collapse extend far beyond individual hardship. Mass migration from increasingly uninhabitable or uninsurable areas strains public services. Healthcare systems in some regions may be overwhelmed by climate-related illnesses and infrastructure collapse. Political tensions rise over resource allocation, with social unrest becoming more frequent. Even if you’ve planned carefully, “aging in place” could mean navigating power outages, volatile food prices, or civil strife—stark realities in a world grappling with half its previous economic capacity. No one, from the lower-income to the ultra-rich, is fully insulated from a rapid, systemic decline in the global economy.

A Call to Action from Actuaries

For someone turning 70 in 2070, a 50% GDP loss could mark the culmination of a lifetime of mounting risk, where everything from pension funds to property values crumbles, and social safety nets erode under relentless economic pressure. Actuaries are not speculating—they’re calculating. If experts trained to price risk are warning of collapse, why are financial leaders still ignoring them?

We must change course now. We need to integrate realistic climate-risk scenarios into our economic models, influence public policy with accurate data, and shift financial systems toward true sustainability. If we wait, we won’t be debating economic forecasts—we’ll be dealing with financial collapse.

The warning signs are flashing. The only question is: will we listen in time? Actuaries aren’t speculating—they’re issuing a final warning. Their 50% GDP collapse projection is based on the accelerating severity of extreme events, the risk of compounding tipping points, and the systemic fragility of the global economy. If we ignore them, financial collapse won’t be a distant threat—it will be our reality.