<p>We examine how climate risks affect the risk management and performance of property-casualty insurers. Our findings suggest that both short-term and long-term climate risks contribute to higher claim ratios at the city-insurer-year level. However, we find no significant evidence that climate risks prompt insurers to improve their risk management practices, such as increasing reinsurance ratios or adjusting geographic business distribution. As a result, climate risks have a substantial negative impact on insurers’ performance. This impact is primarily driven by claim ratios rather than operating expenses or investment returns. Furthermore, the adverse effects of climate risks are more pronounced for insurers with smaller size, lower reinsurance coverage, or more geographically concentrated business.</p>