How the insurance industry can help fight climate change. Or not!
Last month, I posted about how the insurance industry could help fight climate change. The basic idea was that their tendency for sober accounting of risk would lead to policies and pricing that would discourage behavior that could lead to higher potential loses from climate-related disasters.
Well, maybe I was too optimistic.
In general, almost all companies responding to the survey show significant weakness in their preparedness to address the effects climate change may have on their business. However, a small subset of industry leaders are evolving their business strategies to remain competitive as the impacts of climate change unfold. Given the strong scientific consensus on climate change, the rest of the industry would be well advised to follow the lead of these innovative companies.
I still think the industry is in a unique position to play a role in either lobbying for federal action or pricing risk to reduce loses, but that hinges on the decision-makers understanding science, which as Upton notes, is still sadly not a given. To their discredit, the survey found that Allstate and Travelers are the two companies that seem to have the most doubt of the science.
Other key findings:
According to CERES: Of the 184 companies surveyed, only 23 have comprehensive climate change strategies.
Based on their climate risk disclosure responses, the industry leaders include: ACE Ltd., Munich Re, Allianz Group, Swiss Re Group, Farmers Group, The Prudential Group, Travelers Group, Hartford Insurance Group, Kaiser Foundation Health Plan and Zurich US Insurance.