Ocean Risk and the Insurance Industry

Description

A diverse array of ocean-related phenomena occur today and more are expected to emerge in the future as ocean risk evolves in response to the observed and accelerating warming, acidification, oxygen depletion and other man-made threats to the ocean. This report aims to raise awareness of potential insurance industry-related impacts of these interconnected threats and the important role the industry can play in managing emerging ocean risks, seizing new opportunities, and helping to make the industry, the global economy, and society more resilient and responsive to the consequences of a rapidly changing ocean.

To explain how ocean risk affects the insurance industry, the report first provide an overview of the significance of the ocean for the climate and the economy and how our dependency on ocean health and marine resources is going to deepen in the future (Chapter 1). An overview of the observed physical and biological changes in the ocean is reported in Chapter 2, while Chapter 3 describes the impacts associated with these changes, which are affecting the loss potentials in different lines of business for insurers, include alterations to the distributions of extreme weather events and the loss of critical marine ecosystem services. Modelling the impacts associated with ocean warming requires improved, or entirely new, risk models to enable a proper quantification of ocean risks (Chapter 4). Whilst there are challenges from ocean warming, there are also opportunities for the insurance industry. New insurance solutions for ocean risk are presented in Chapter 5. The report closes with a set of recommendations for individual insurers and an industry response to the emergence of ocean risk (Chapter 6).

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