As the industry gears up to deliver against the heightened expectations around climate change that COP 26 will set in train, we predict ten factors will differentiate global best in class re/insurers from the pack.
- The tone at the top will focus consistently on the risks and opportunities of a changing climate.
- Re/insurers will focus not just on their own action on climate change, but will raise expectations of employees, clients and other stakeholders including agents, brokers and third-party service providers.
- There will be a genuine whole of business appetite to understand and quantify the impact of physical, transitional and liability risks arising from climate change and increasing weather and natural catastrophe exposures.
- Significant investment will be made in mining and analysing deep scientific data to build understanding of the financial risks and exposures of the underwriting business.
- Climate change will be hard-wired into re/insurers’ operational and risk management frameworks.
- There will be genuine engagement with the community and customers to educate and foster an understanding of the benefits of adopting pre-loss risk reduction and mitigation steps.
- Re/insurers will develop incentives to drive insureds to adopt climate mitigation steps and acknowledge and reward insureds.
- Product development will go into overdrive and will likely include the widespread rollout of parametric/index type indemnity trigger policies to the retail consumer market.
- Product extensions may include practical and mental health support services for businesses in the post loss claims environment.
- There will be a focus on technical and soft skills development among underwriting and claims staff and a shift in recruitment focus to ensure businesses have the skills required to build on climate change momentum.
View all our Insurance 2021 predictions here