A report by one of the world’s largest reinsurance firms has highlighted the important role insurers must play in tackling climate change and developing renewable energy.
A global shift towards cleaner sources of power will “provide new growth opportunities” for the industry, according to the study by Swiss Re. It adds that the need for insurance cover will increase during this transition.
“Insurers should support the further development of low carbon-intensive power production”, said Agostino Galvagni, CEO of Swiss Re corporate solutions.
“They need to be innovative and provide solutions along the whole value chain. For example, insurers can enable project financing through construction insurance and reduce cash flow volatility of intermittent energy production through weather risk transfer solutions.”
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Under Swiss Re’s best case scenario, renewable energy would make up 92% of the global energy mix by 2050 – though it stresses that this outcome would require “a successful mix of political, social and technological factors”.
“This study clearly shows that renewable energy will play an important role in the global power mix of the future”, said Andreas Spiegel, head of sustainability and political risk at Swiss Re and author of the report.
“At the same time it shows that adaptation to climate change will increase in importance because the window of opportunity for mitigating climate change is getting much narrower.”
The reinsurer’s study comes after research conducted in Delaware, US, found that a combination of wind power, solar energy and state-of-the-art storage technology could almost completely power the US in the future.