Climate change and the insurance industry

The Geneva Association, a leading international insurance think tank, has released a research report on the role the insurance industry can play in supporting climate adaptation and mitigation efforts.

Climate change and the insurance industry report coverThe report was released ahead of the 2018 World Economic Forum that will take place in Davos this week. Because of Aegon's involvement in the Geneva Association and its strong endorsement of the views presented in this report, Aegon puts its full support behind it.

The report 'Climate Change and the Insurance Industry: Taking Action as Risk Managers and Investors' interviewed 62 C-level executives on the measures they were taking to address climate change and key barriers preventing the industry from scaling up initiatives.

While the insurance industry is demonstrating action toward addressing the climate challenge, external hurdles such as limited access to risk information and public policies continue to hinder their contributions. Furthermore, climate resilient and decarbonized critical infrastructure represents an opportunity that poses specific challenges for the insurance industry, due to risk data needed to assess infrastructure projects throughout their lifecycle.

Three recommendations

The Geneva Association puts forward three recommendations to accelerate the contributions of the insurance industry towards climate change.

  • Third party stakeholders such as governments, policymakers, standard setting bodies and regulators across sectors work in a more coordinated fashion to address key barriers that hinder insurers from scaling up their contributions to climate adaptation and mitigation.
  • The insurance industry should continue to institutionalize climate change as a core business issue, expand its contributions towards building financial resilience to climate risks and support the transition to low-carbon economy by collaborating with governments and other key stakeholders.
  • Governments and the insurance industry should explore ways to support, climate resilient and decarbonised critical infrastructure through the industry's risk management, underwriting and investment function.

Aegon CEO, Alex Wynaendts, is a member of the Board of Directors of the Geneva Association and will be present this week at the discussions in Davos. Alex Wynaendts has previously endorsed initiatives such as the Task-force on Climate-related Financial Disclosures (TCFD), furthering Aegon's commitment to take action on climate change.