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Beyond Compensation: the Insurance Industry’s Role in Climate Resilience

August 17, 2017 |

This article was originally published on Business Insurance

“Nearly 2,000 disclosures to a climate questionnaire issued last year by CDP, a London-based organization that works with shareholders and corporations to disclose greenhouse gas emissions, revealed that one in five companies rely on insurance as a part of their climate change risk management strategy, not just to compensate losses but also to guide investments in prevention and protection.

Private-sector strategies to continue operations and reduce financial losses in the face of intensifying storms, sweltering temperatures and pressured supply chains include a variety of process-driven and engineered measures, from strengthening relationships with partners to building flood barriers.

Insurers informed many of these strategies as companies in manufacturing, utilities, pharmaceuticals and others looked to their insurers as the thought leaders on climate risk and relied on their models for downscaled climate data. Coloplast A/S, a Danish pharmaceuticals company, relies on its property insurer FM Global as its “main assets safety advisor to identify and mitigate climate-related risks.” Praxair Inc., a chemicals company, also depends on its insurer for “rigorous standards based on their own scientific research and proven solutions that often go beyond national recommendations.”

Insurers’ assessments often lead to investments in more resilient infrastructure. Equinix Inc., a technology company, involves its insurer at the building design phase to incorporate climate projections into decisions about floor height, placement of storage tanks, maintenance schedules and more. Georg Fischer, a Swiss electrical equipment company, involved insurance expertise after its Traisen, Austria, production site flooded. The company decided to build dams and channels based on projections of intensifying rainfall events…”

Read on at: Business Insurance.

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