London, United Kingdom (CU)_ Insurance Europe, headquartered in Brussels and owns 37 national insurance organisations, has established a dedicated “Sustainability Hub” to promote the insurance industry’s initiatives towards a sustainable world. The online resource covers six major areas. They are underwriting; risk awareness and prevention; public-private relationships; investment; reporting and transparency; and industry pledges, alliances, and coalitions.
In the category of alliances, it was highlighted that Insurance Europe is a member of the Green Recovery Alliance and a promoter of the Net-Zero Asset Owner Alliance. The United Nations Principles for Responsible Investment have also been signed by a number of European insurers. In the category of underwriting, Lloyd’s insurance market was singled out for its efforts to enhance the analysis and quantification of locations and risks that are either poorly simulated or not modelled at all. According to Insurance Europe, as the climate changes, disaster models would play an essential role.
The European insurance and reinsurance federation explained about the non-life insurances. It said, “Non-life insurance necessarily involves dealing with the effects of climate change, since it includes cover for environmental and weather-related risks”. It added, “Insurers offer that cover to policyholders on the basis of their vast knowledge of the risks related to extreme weather events and their expertise in measuring, modelling, and pricing weather-related risks.
The organization further discussed the process. It said, “What is more, insurers can – and do – use their underwriting approach to motivate policyholders to reduce their risks by investing in adaptation and prevention measures or to reduce their carbon footprints by opting for green/energy-efficient alternatives. They do this through risk-based insurance premiums; excesses or deductibles; requiring certain prevention measures as a condition of a policy; and other policy terms and conditions.” Insurance Europe also quoted examples of risk awareness and prevention, awareness-raising campaigns, education-related activities, and tools and solutions for both customers and insurers.
In terms of investment, the industry organization noted the European insurers’ role in the climate change initiatives. It said, “The transition to a carbon-neutral economic model requires long-term financing. European insurers – Europe’s largest institutional investors with around €10 trillion in assets under management – play a key role here”. It added, “Insurers have been at the forefront of sustainable investment for many years, taking concrete actions such as implementing sustainability-related disclosures, standards, and strategies into their portfolios.”
