Swiss Reinsurance Company (Swiss Re)
Swiss Re pledges USD 10bn in insurance protection and expertise to help nations strengthen climate resilience by 2020.
The UN-led Climate Summit in New York, convened on Tuesday 23 September by Secretary-General Ban Ki-moon, put pressure on governments to adopt aggressive domestic strategies for reducing emissions and investing in clean energy technologies. Swiss Re's Group CEO, Michel Liès, addressing government leaders at the summit, pledged to offer USD 10 bn in insurance capacity and expertise to help nations make reality of the stringent climate strategies required by 2020.
Christina Figueras, the UN Climate Chief, told the press before the summit: "We are running out of time. We can no longer afford the luxury of being gradual or incremental. We need very, very stark changes right away." Representatives from 125 countries attended the UN Climate Summit, including US President Barack Obama. China and the US together account for roughly 45 percent of all carbon dioxide emissions, putting much of the onus for climate action on them. The EU, India, Russia, Japan and Brazil are amongst the other top emitters.
Risk reduction incentives key
Liès affirmed the insurance industry's commitment to work with the international community to help increase climate resilience. He also explained that aligning capital and community interests via the mechanism of insurance is a very effective way forward. "This not only increases shock absorbing capacity, but adds rigor in terms of risk analysis and helps to incentivize risk reduction."
As a first step, access to insurance must be fast-tracked in ways that support climate-resilient development. "Despite some great examples where innovative sovereign climate risk financing solutions have been implemented, such as the African Risk Capacity, the Caribbean Catastrophe Risk Insurance Facility and the Pacific Catastrophe Risk Insurance Pilot, some 75 percent of catastrophe losses around the world are still uninsured, and the signals to incentivize climate risk reduction are not yet strong enough," he said.
USD 10 bn against risk
Building on World Bank President Jim Yong Kim's call for more emphasis on sovereign disaster risk financing earlier in the day, Liès went on to pledge financial capacity and expertise to support governmental climate action: "By the year 2020, Swiss Re commits to having advised 50 sovereigns and sub-sovereigns on climate risk resilience, and to have offered them protection of USD 10bn against this risk."
By multiplying its climate risk financing capacity for sovereigns and subsovereigns, along side a team dedicated to advising national and regional governments on how to better manage disaster risk, Swiss Re affirms the urgency of climate risk based on external and proprietary studies. The good news is that up to 65% of climate risks can be averted through conscious risk management and cost effective resilience measures.