Short-term Insurance Strategic Risk Forum
Short-term Insurance Strategic Risk Forum
Short-term Insurance Strategic Risk Forum
Climate Changeand the
Insurance IndustryJohn Melville
Chairman: Strategic Risk Forum10 June 2012
Short-term Insurance Strategic Risk Forum
The Issue
• Climate change driven by rising carbon dioxide levels and the greenhouse effect
• Climate change is driving • Rise in global average temperatures• Melting of polar ice caps• Increase in frequency of weather-related
natural hazards (storms and droughts)• Increase in frequency and severity of
natural disasters
Direct impact on the viability of insurance
Short-term Insurance Strategic Risk Forum
Our Value Proposition
• Pool risk• Enables transfer of individual risk to collective
• Custodians of SA risk Pool• Understand risks• Influence behaviour of customers and investors• Ensure insurance industry continues to be
viable and affordable
• Key enabler of economic activity
Short-term Insurance Strategic Risk Forum
The role of Insurance in the Economy
• A collective ‘safety net’ and a lever of economic and social development
• A key enabler and transmission mechanism for economic activity
• A catalyst in the financial and investment flows needed for sustainable development
Short-term Insurance Strategic Risk Forum
The role of Insurance in the Economy
Without insurance, nothing is built, nobody works, nothing floats, nothing runs on tracks, and nothing ships. But in addition to that,
nothing is repaired. It rebuilds lives, cities, and companies.
The World Trade Center would not be rebuilt without the insurance industry, which pumped $4.4 billion into it.
Communities that are wiped out by hurricanes are rebuilt by the insurance industry.
Joe Plumeri, CEO Willis Group, Insurance Conference 2012
Short-term Insurance Strategic Risk Forum
Our ResponsibilityReduce carbon footprint and encourage others to do the same
Promote actions and behaviour that
specifically increases
resilience to storm, hail and drought
risk
Understand vulnerability profile of
our insured landscape in relation to storm,
hail and drought risk
This includes the actions and behavior of individuals, businesses, local authorities, and governments to increase resilience to risk
Short-term Insurance Strategic Risk Forum
Our Future
• Role of the underwriter will assume greater importance
• Only risks meeting necessary standards will be insurable
• Investment in underwriting capabilities allowing for climate change will determine long-term success or failure
• Sustainability of insurance is vital from economic perspective
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Short-term Insurance Strategic Risk Forum
Thank You