Insurers, reinsurers should do more to mitigate impact of weather, climate risks: Report
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Insurers and reinsurers should do more to help mitigate the impact of severe weather and climate risks, according to a report issued Thursday by Boston-based Ceres.
“We have seen excellent examples of insurer-sector leadership in addressing climate risks, but industrywide engagement and action in this regard is nowhere near its potential,” said the report, “Stormy Future for U.S. Property/Casualty Insurers: The Growing Costs and Risks of Extreme Weather Events.”
“Insurers have much to offer, and much at stake, in helping governments and private markets to further understand and develop solutions to better predict and prevent losses from extreme weather events,” according to the report. “For instance, stronger resiliency to extreme weather is of great importance to the insurance sector, as it reduces property risks and promotes future insurability.”
Among other things, the report recommends that insurers and reinsurers update pricing and underwriting to reflect changes in extreme weather impacts and promote the reduction of carbon emissions. It calls on rating agencies to conduct analysis of insurance company exposure and management responses to extreme weather risks, and urges regulators to strengthen mandatory climate risk disclosures by insurers.
Ceres is a coalition of investors, environmental groups and other organizations that works with businesses to address sustainability challenges, including climate change.
