Insurers under pressure to do more after the summer they will never forget

 By Lucy Burton

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With scientists warning that climate change is worsening, insurance chief executives will be under increasing pressure to come up with products or investments that could actively delay its impact. Some examples exist, which could be built on. Aviva, for example, launched a “pay-as-you-drive” scheme a number of years ago with the aim of reducing CO2 emissions, while Lloyd’s has suggested that insurers invest in coral reefs and mangroves to dampen the impact of coastal storms after finding that coastal habitats absorb wave energy and so act as a natural defence, therefore reducing the amount insurers pay out in claims.

“We’ve got to do it right,” said Maurice Tulloch, Aviva’s chairman of global general insurance and chairman of ClimateWise, an industry group that drives research on climate risk. “The frequency of more severe events has been increasing year on year. I’m no longer having to convince people when I speak to them that we’re going to see more of these. As an industry we’ve got a role to play, we have to act now.”

But as insurers around the world ramp up efforts to adapt and manage risks, the list of tasks they face is endless. The full impact of Irma and Harvey will be unclear for some time, and the sector is under pressure to make sure that those in developing economies, who do not have insurance cover, are protected, with countries around the equator most vulnerable to extreme weather disasters.

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