Coping with climate change - risks and opportunities for insurers

The world’s climate is changing, due mainly to human behaviour, and the effects are predicted tointensify progressively. Already the insurance industry is faced with significant challenges, such asthe increase in flood risk in the UK. However, the need to manage climate change risks effectively,and deploy clean technologies to avoid further global warming will increase the demand for insuranceproducts and services, and presents the industry with numerous opportunities.The Chartered Insurance Institute’s third major study into the effects of climate change for theinsurance sector looks at strategic issues that face the insurance industry from the perspective ofUK-based insurance practitioners, including the London Market, and in critical areas of developingcountries. Building on previous works on climate change by the CII, in 1994 and 2001, the studyconsiders how climate change affects all aspects of the insurance industry, including its corefunctions of underwriting, claims handling, investment, and management and examines theimplications for customers in key market segments. It takes account of current scientific researchin the field, relevant political initiatives, the recent experience of the insurance markets anddevelopments in the global economy.[...]