CEOs of ClimateWise welcome the Prudential Regulation Authority’s assessment of the impact of climate change on the insurance industry, yet warn that more needs to be done to improve resilience.
The leaders of 15 ClimateWise members have today written an open letter to Mark Carney, the Governor of the Bank of England, and the UK’s Prudential Regulation Authority (PRA). They welcome the PRA’s initiative to be one of the first insurance regulators globally to examine the likely impact that climate change will have on the insurance industry and its customers. The insurance leaders are also calling for the PRA’s report to lead to more urgent collective action to reduce the risks of climate change impacting society, and ultimately the insurance industry.
ClimateWise is the insurance industry leadership group on climate change risk, with the secretariat provided by the University of Cambridge Institute for Sustainability Leadership (CISL).
The PRA report, ‘The impact of climate change on the UK insurance sector’, is one of the first examples globally of an insurance regulator examining the impact that climate change risk could have on the insurance industry and its customers. To help inform the report, ClimateWise supported the PRA by convening a series of roundtables that brought together industry leaders and academic experts on topics ranging from the physical impacts of climate change on insurers’ underwriting activities to the impact different responses to climate change may have on their investment portfolios.
ClimateWise Chair Maurice Tulloch, also Chairman of Aviva Global General Insurance and CEO, Aviva UK & Ireland General Insurance, explains:
“The PRA report highlights a number of important risks the insurance industry, its regulators and customers will need to collaborate on in order to build societal resilience to the impacts of climate change both economically and equitably. Yet the greatest priority is to ensure that we minimise the future levels of climate risk we will face. This is why strong action today, to limit global warming to below 2oc, is so important.”
Reinforcing the potential impacts of climate change, a recent report authored by Sir David King (the UK Foreign Secretary’s Special Representative for Climate Change), entitled Climate Change, A Risk Assessment, noted – for example – that with one metre of global sea level rise, the probability of what is today regarded as a ‘100-year flood’ will become about 40 times more likely in Shanghai, 200 times more likely in New York and 1000 times more likely in Kolkata.
As the probability of extreme events increases in this way, it typically becomes far more difficult to insure against them – and certainly below levels deemed affordable by customers. The result would be a society less prepared for any future shocks climate change may bring.
This highlights the urgent need for a broader, systemic and more societally focused response to managing the risks of climate change. In their letter, ClimateWise members note that insurers should be enabled to better align their investment and risk management capabilities, while maintaining the financial security of their clients, so that invested capital flows can contribute to enhancing the overall resilience of society beyond the traditional financial risk transfer role insurance currently plays.
ClimateWise members also called on the PRA to ensure ‘this engagement is only the first step in a much broader journey of collaboration aimed at managing the impact of climate change risk for the industry and its clients.’
Click here for further information on the PRA report please visit.
The letter and its signatories
ClimateWise CEO’s respond to the Prudential Regulation Authority’s report on the impact of climate change on the UK insurance sector
As leaders from across the global insurance industry, we share the view that climate change poses one of the greatest challenges to the long-term health of global economies and societies and, as such, demands urgent action. Consequently, we have voluntarily committed to ClimateWise – the insurance industry leadership group on climate change risk – to help identify ways that the insurance industry can support the societal transition to a low-carbon, climate-resilient future.
As members of ClimateWise, we welcome the UK insurance regulator, the Prudential Regulation Authority (PRA), taking the initiative to examine the impact of climate change from the perspective of the insurance industry. We are already trying to respond to climate change as framed by reports such as The World Economic Forum 2015 Global Risks Survey which identified a failure of climate adaption as one of the top four high-impact, high-likelihood risks.
We commend the PRA for leading insurance regulators globally in focusing on this critical issue. We also look forward to this engagement being only the first step in a much broader journey of collaboration aimed at managing the impact of climate change risk for the industry and its clients. As members of the insurance industry, we want to work together towards achieving a regulatory regime that allows our industry to fulfil its full potential as society’s risk-manager and to help maintain risk exposure within insurable levels. Such a regime is one that would enable us to better align our investment and risk management capabilities, while maintaining the financial security of our clients.
§ Andrew Kendrick (President) – ACE European Group
§ Charles Philipps (CEO) – Amlin
§ Dominic Christian (Executive Chairman) – Aon Benfield
§ John Spencer (Non-Executive Chairman) – ArgoGlobal – Syndicate 1200
§ Maurice Tulloch (CEO) – Aviva UK & Ireland General Insurance
§ Andrew Horton (CEO) – Beazley
§ Phil McNeilage (CEO) – Cunningham Lindsey
§ Bronek Masojada (CEO) – Hiscox
§ Torbjörn Magnusson (President & CEO) – If P&C
§ Andrew Roberts (CEO) – Innovation Group
§ Inga Beale (CEO) – Lloyd’s
§ Stephan Coward (President of Technical Risk) – Navigators
§ Richard Murphy (CEO) – Renaissance Re
§ Stephen Hester (CEO) – RSA Insurance Group
§ Gary Shaughnessy (CEO) – Zurich UK
A Good Look At How Homes Will Become More Energy Efficient Soon
Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.
There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.
1. The Rise Of Smart Windows
When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.
If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.
2. A Better Way To Cool Roofs
If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.
Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.
3. Low-E Windows Taking Over
It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.
They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.
4. Magnets Will Cool Fridges
Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.
The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.
5. Improving Our Current LEDs
Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.
That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.
Maybe Homes Will Look Different Too
Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.
ShutterStock – Stock photo ID: 613912244
IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”
IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.
Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.
Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.
Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:
“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.
We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.
There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.
We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”