The Chartered Insurance Institute (CII) has released new research setting out the challenges for the insurance sector following the recent United Nations Climate Change Conference In Paris (insurance advice).
The report has also been released in the wake of the World Economic Forum’s Annual Global Risk report, in which the failure of climate change mitigation and adaptation was found at the top of its main risks. The research identifies two key challenges facing the insurance sector:
The mitigation policies that have been put into place to reduce greenhouse gas emissions, this process will transform the technologies that underpin our mode of life with consequent shifts in economic power between countries and companies.
Adapting to extreme weather patterns the current climate has become more extreme. As this pattern is expected to continue it implies greater risk for weather perils. In particular, Greenland ice-melt has created a huge temperature anomaly in the north Atlantic, raising the prospect of freakish conditions for the UK.
Laurence Baxter, head of policy and research at the CII, said: “These key issues debated at the Paris conference present both new risks and opportunities. The insurance sector can play an important role in both areas. But it needs to take a more proactive role and collaborative with other stakeholders to present some risks becoming uninsurable safeguard its assets under management, and take advantage of new markets. This applies to general insurance and life assurance, with pensions and investment, through the issues is somewhat different for the three sectors”.
The report also discusses the commitment the G7 has made to provide support on developing specific insurance and risk management tools aimed at climate change. This was agreed after the Paris conference observed development has been slow in this area.
(Chartered Insurance Institute, The Journal, Feb 2016)
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