The aim of our newsletter is to give you easy access to articles and resources to support insurers’ and brokers’ sustainability journeys. While all aspects of ESG are critical and are truly intertwined our focus is primarily on the climate agenda and ensuring support for building a more sustainable world.
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Paolo & Brandon
Climate risks to add $183bn to property insurance costs by 2040, Swiss Re predicts
Mike Daly, InsurTech World, 7 September 2021
Climate risks are expected to add as much as $183bn to annual premiums for property insurance by 2040, as the growing frequency and severity of extreme weather prompts insurers to raise prices. Swiss Re Institute, the reinsurance group’s research unit, predicted on Monday that climate-related risks would account for just over a fifth of the overall rise in property premiums over the next two decades.
What smart people get wrong about climate change extremes
Kate Mackenzie, Bloomberg / fin24, 11 September 2021
But in practice the unknowns are still being overlooked. New scenarios produced for the central banks’ climate network in June, for example, only consider the effects of increases in temperature, excluding other factors such as extreme weather and sea-level rise.
Pitman, director of a multi-university centre on climate extremes in Australia who has also contributed to previous IPCC reports, points to financial stress tests and macroeconomic modelling as one example of where this kind of thinking goes wrong.
What the IPCC report means for insurers: The Oxbow Partners view
Fenna Agnew, Oxbow Partners, 19 August 2021
The insurance industry is uniquely positioned to support these efforts. Global warming is a particularly pertinent issue for the industry as it threatens insurers on the underwriting side through more extreme weather events, and on the asset side through the financial uncertainty of the transition to a decarbonised economy. However, insurers can leverage their investment and underwriting processes to drive forward efforts to reduce emissions.
U.S. Treasury climate official seeks insurance changes for extreme weather
Andrea Shalal and David Lawder, Reuters, 10 September 2021
The Federal Insurance Office will accept input for 75 days and then come up with recommendations for better pricing the risks that climate change posed to insured properties and activities, Morton said.
"The question is, how do we ... better understand and begin to price the risk inherent in the underlying activities," he said.
In its Aug. 31 request for information, it cited a dramatic increase in the frequency and severity of climate-related disasters, and said they had resulted in growing economic losses and financial risk.
UK flood modeller secures backing from leading risk assessment firm
Intelligent Insurer, 9 September 2021
UK flood modeller Fathom has secured backing from a leading global risk assessment firm to expand its presence in global markets across multiple sectors including re/insurance, risk management, financial services, engineering and disaster response.