Insurance Europe has said that the continent’s insurers and reinsurers are still willing to play their ‘important role’ in tackling climate change.
In putting out this statement just before COP27, the body said that climate change had been a key priority for the reinsurance and insurance industry for decades.
Insurance industry has a multifaceted role in both contributing to limiting climate change and helping citizens and societies deal with its effects.
This includes offering financial protection against natural catastrophe risks, as well as sharing risk management expertise with governments and customers to help reduce and prevent risks.
As Europe’s largest institutional investors, with over €10tn of assets under management, insurers play a key role in helping to fund the transition to sustainability.
It is now clearer than ever that combatting climate change and building resilience demands urgent and concerted efforts. Indeed, the latest report by UN Climate Change in October 2022 highlighted once again that more ambition is needed, as current efforts would result in a 2.5 degree Celsius warming by 2100, which is far away from the objectives of the Paris Agreement.
Insurance Europe said the industry could only make a real difference if certain conditions were met.
These include, notably, a regulatory landscape that facilitates our industry’s contribution to the green transition and a strong focus, notably by public authorities, on prevention and adaptation. The sector stands ready to engage with all interested parties to identify how these conditions can be met in the most efficient way.
In July, it responded to a consultation by the Financial Stability Board (FSB), saying that there is no evidence to say that insurers are particularly vulnerable to system-wide impacts from climate change.
Insurance Europe has been vocal in recent months about the roles that reinsurers and insurers can play in the climate change issue.
The federation that presents the European insurance market said in an eight-page response said that systemic risk emanating from climate change is neither faced nor transmitted by insurers, but by society as a whole.