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ARTICLE · 27 OCTOBER 2023

The Potential For Rate-induced Climate Tipping Points In Insurance Markets

The phrase "tipping point" was first popularized in 2000 by the author Malcolm Gladwell, who wrote about how seemingly minor changes in a system can accumulate...

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The phrase "tipping point" was first popularized in 2000 by the author Malcolm Gladwell, who wrote about how seemingly minor changes in a system can accumulate to create a "moment of critical mass" that has a major impact1. Gladwell primarily discussed tipping points caused by social contagion, which is when behaviors and attitudes spread through social interactions, such as trends in fashion, music, or crime. But tipping points also exist in many natural systems, including the Earth's climate.

Traditionally, climate tipping points have been best understood as a transition from one base state to another.

The Intergovernmental Panel on Climate Change defines a tipping point as a critical threshold beyond which a system re-organizes, often abruptly and/or irreversibly2. Traditionally, climate tipping points have been best understood as a transition from one base state to another (also known as bifurcation-induced tipping). The transition is usually associated

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