Insurers demand key role in climate adaptation

Over 100 of the world's leading insurance companies joined forces yesterday to urge world leaders to draw on the industry's expertise to shape climate adaptation policies for developing countries being worked on as part of the UN's climate change negotiations.

The Prince of Wales's ClimateWise insurance industry group, the Geneva Association think tank, UN Environment Programme Finance Initiative (UNEP FI) and Munich Climate Insurance Initiative, which together represent the world's leading insurance and risk management firms, co-ordinated the joint statement calling on governments to better support proven insurance mechanisms for tackling climate change risks.

The four-page statement, which was released on the eve of the British government's Capital Markets Climate Initiative conference in London, argues that public-private initiatives would allow insurers to extend climate-related policies to developing economies that would help them to manage the risks posed by extreme weather events.

Specifically it calls on governments to formally acknowledge the role of the insurance industry in the on-going UN climate change negotiations and deliver funding and regulatory frameworks that enable the wider rollout of climate-related insurance products.

Andrew Torrance, chairman of ClimateWise and chief executive of Allianz Insurance, said that it was in governments' own interests to utilise the risk management skills found in the insurance industry.

"With climatic disasters inflicting more and more damage, the increasing reliance of governments on foreign aid alone is unsustainable," he said. "As the global climate continues to warm, we have to find new ways to protect people and economies from the impacts of extreme weather, particularly those who are most vulnerable. Insurers have much to offer, but this potential can only be leveraged through a partnership approach with governments."

His comments were echoed by Achim Steiner, UNEP Executive Director, who urged governments to enter into partnership with the industry in order to support wider trials of micro insurance and climate insurance schemes.

"The insurance industry is making it clear: it has the expertise and the creative solutions to assist vulnerable countries and communities manage the risks of climate change," he said. "But it is a partnership that works both ways. Governments need to act on this opportunity and harness this reservoir of risk assessment skills."