Climate Change and the Insurance Industry: Taking Action as Risk Managers and Investors

The insurance industry is uniquely positioned to further understanding of the risks that climate change imposes on societies and their livelihoods. This is because insurers play a dual role as risk managers protecting society’s assets and long-term investors funding the economy. The insurance industry’s societal mandate is to devise innovative risk-transfer solutions that minimise the financial consequences of uncertainty. In the face of climate change, such a mandate is now more relevant than ever.

This report is based on interviews with 62 C-level executives of globally active insurance and reinsurance companies. It details the array of activities undertaken by the insurance industry to address climate change adaptation and mitigation.

In Section 2 it highlights the latest developments in addressing the climate change challenge. Section 3 offers a quick look into the foundations of the insurance business model. In Section 4 the study provides findings, including actions being undertaken by the insurance industry, as risk managers and investors, to address climate adaptation and mitigation, and highlight critical challenges hindering the industry in doing more. Section 5 provides conclusions and recommendations for the way forward.