Climate change perspectives
Climate change affects everyone, especially the insurance industry and the people that rely on relevant business, home and car insurance. With that in mind, Intact Lab’s Patrick Khalil spent most of the past year at the industry’s foremost international think tank: the Geneva Association, where he worked within the Extreme Event and Climate Risk program, focusing heavily on best practices for catastrophic events and environmental risk management. What did he learn and how does it apply to you? Here are five key takeaways from his experience.
Lesson One: Climate Change Already Makes a Significant Impact
Climate change is here. In the last three and a half decades, economic losses from weather-related disasters – meteorological, hydrological, and climatological – have risen. These pose a growing hazard to human lives, livelihoods, and health, as well as impairing socio-economic growth and development.
Lesson Two: The Risk is Growing
The threat of large-scale natural disasters continues to increase. Moreover, it is estimated that 70-to-75 per cent of total economic disaster losses in all nations remain uninsured and would need to be absorbed by national economies and tax payers. In 2016, the Global Risks Report of the World Economic Forum identified “failure of climate change mitigation and adaptation” as the highest risk facing society. In short, the jeopardy is real. But what now?
Lesson Three: We Must Better Understand the Danger
Currently, the complexity of the global climate system complicates our knowledge of the danger. Nevertheless, during his time in Switzerland, Patrick and his colleagues investigated risk modelling approaches that should make a difference and illuminate more of the nuances around this issue.
Lesson Four: We’re in This Together
While the insurance industry has a very important role to play, cooperation is key to preparation and protection. The task at hand exceeds the capabilities of the industry or the public sector working in a vacuum. Instead, they must share resources and work together to foster change.
Lesson Five: Progress is Happening
Efforts are already in motion. The Geneva Association and other organizations continue to look at prevention, spatial planning, infrastructure changes, early warning systems, and local resilience measures. Best practices around risk management are being explored. And three international framework agreements – the Sendai Framework for Disaster Risk Reduction (2015 – 2030), The 2030 Agenda for Sustainable Development; and The Climate Change Paris Agreement – have highlighted the importance of insurance in building economic resilience.
Going forward, the insurance industry has a major role to play in preparing for climate change and protecting people everywhere. To learn more, visit www.genevaassociation.org.