Insurance and other financial services (original) (raw)
The Impact of Climate Change on the Insurance Sector
Financial economic review, 2017
One of the key tasks and core competencies of the insurance sector is to assess natural risks on a continuous basis and to manage the potential impacts of those risks. It is therefore not surprising that from the beginning, the insurance sector has been an active participant in modelling the impact of climate change and in identifying possible solutions. Before coming to our analysis of the relationship between the insurance sector and climate change, it is essential to explain key terms and basic possible impacts. For that reason, we start our paper with a brief summary of the causes of climate change and the most important groups of consequences, and a description of the European milestones on the road to the low-carbon economy. The impact of climate change on the insurance sector is explained through a German and an English example, in each case presenting and construing the assertions of a relevant study. In addition to an explanation of the differences in the approaches which a...
Building financial and insurance resilience in the context of climate change
Ekonomika poljoprivrede, 2017
The key challenge for individuals, businesses and governments would be the building financial and insurance resilience in changing climate. It becomes important issue for the financial management to create financial protection and insurance means to manage the financial losses, reducing the economic impact of disaster events, and supporting better recovery. In accordance with that the Paper provides an overview of the field and desk research of potential income implications of climate change for the financial management of disaster risks and losses. Desk research is based on Serbian case and its experience with the 2014 floods. Key findings of the field research provided in Serbia in 2016 on managing the risk of natural disasters, floods, fires, earthquakes as a part of organizational risk in 92 manufacturing firms, banks and insurance companies is also provided in the Paper. The methods used are: statistical description, X2 test and liner regression models. The results of both researches on risk management of floods showed that: companies calculate the impact of this risk to their year revenues as small, also a non-strategic approach of the Serbian government can be seen, as a financial gap of 65% in covering the losses. The research results pointed also to low awareness of the problem on the corporate and national level. The contribution of the Paper is to support further development of country and local plans for more effectively reducing the economic disruption of disaster events and policy approaches to supporting the penetration of disaster finance and insurance coverage and the capacity of insurance markets to absorb these risks. Also, to support the improvement of the culture of risk management of business sector in this field.
Climate Change, Extreme Events and the Canadian Insurance Industry
Earthquake and Atmospheric Hazards, 1997
At the same time that a scientific consensus has arisen that the world will most likely experience a changing climate in the near future, with more frequent extreme events of some weather hazards, the insurance industry, worldwide, has been hit with rapidly escalating costs from weatherrelated disasters. This conjunction of scientific belief and economic impact has raised the questions as to (1) whether more frequent extreme events have contributed to the rising insurance costs and (2) how will future climate change affect the industry?
The Role of Insurers in Promoting Adaptation to the Impacts of Climate Change
The Geneva Papers on Risk and Insurance - Issues and Practice, 2007
Scientific evidence is accumulating that climate change is having an impact on the frequency, intensity and geographical distribution of extreme weather events. With these trends likely to continue for the foreseeable future, the insurance industry can help society to adapt, by limiting and managing risks associated with extreme weather, and thereby maintaining the insurability of potentially vulnerable and exposed populations. There are already examples of the insurance industry promoting efforts to mitigate the impacts of weather hazards, by disseminating information about reducing the vulnerability of properties, offering financial incentives to invest in mitigating the impacts of extreme weather, and by working in partnership with policy-makers to establish maximum thresholds of acceptable risk. However, these efforts need to be more widely promoted by insurers to make a significant contribution to society's adaptation to climate change.
A Global Review of Insurance Industry Responses to Climate Change
A vanguard of insurers is adapting its business model to the realities of climate change. In many ways, insurers are still catching up both to mainstream science and to their customers, which, in response to climate change and energy volatility, are increasingly changing the way they construct buildings, transport people and goods, design products and produce energy. Customers, as well as regulators and shareholders, are eager to see insurers provide more products and services that respond to the ''greening'' of the global economy, expand their efforts to improve disaster resilience and otherwise be proactive about the climate change threat. Insurers are increasingly recognising the issue as one of ''enterprise risk management'' (ERM), one cutting across the domains of underwriting, asset management and corporate governance. Their responses are becoming correspondingly sophisticated. Based on a review of more than 300 source documents, plus a direct survey of insurance companies, we have identified 643 specific activities from 244 insurance entities from 29 countries, representing a 50 per cent year-over-year increase in activity. These entities collectively represent 1.2trillioninannualpremiumsand1.2 trillion in annual premiums and 1.2trillioninannualpremiumsand13 trillion in assets, while employing 2.2 million people. In addition to activities on the part of 189 insurers, eight reinsurers, 20 intermediaries and 27 insurance organisations, we identified 34 non-insurance entities that have collaborated in these efforts. Challenges and opportunities include bringing promising products and services to scale, continuing to identify and fill market and coverage gaps and identifying and confirming the veracity of green improvements. There is also need for convergence between sustainability and disaster resilience, greater engagement by insurers in adaptation to unavoidable climate changes and to clarify the role that regulators will play in moving the market. It has not yet been demonstrated how some insurance lines might respond to climate change and a number of market segments have not yet been served with a single green insurance product or service. As insurer activities obtain more prominence, they also will be subject to more scrutiny and expectations that they are not simply greenwashing.
Insurer Resilience in an Era of Climate Change and Extreme Weather: An Econometric Analysis
Having sustained, over the course of more than two decades, record-breaking natural catastrophe losses, American insurers and reinsurers are justifiably questioning the potential linkage between anthropogenic climate change and extreme weather. Here, we explore issues pertaining to this linkage, looking at both the likely short-term implications for the insurance industry, as well as potential longer-term impacts on financial performance and corporate resilience. We begin our discussion with an overview of the implications that climate change is likely to have on the industry, especially as it relates to how catastrophic risks are construed, assessed, and managed. We then present the rudiments of an econometric analysis that explores the financial resilience of the property/casualty (P/C) industry in the face of both natural and man-made catastrophes. In this analysis, we explore the profitability consequences of several illustrative scenarios involving large-scale losses from extre...
The analysis proposed in this study concerns literature reviews among the ways in which insurance companies cope with climate change, natural disasters and climate risk management. The paper aims to explore the several adaptation measures against climate change adopted by insurance companies for the development of models able developing an acceptable risk forecast. The importance of the paper is substantiated in a structural analytical study of the most important literature on the adaptation of insurance companies to climate change, highlighting the methodologies and specific cases. The conclusions of the paper highlight the natural relevance and relationship between insurance companies, the mandatory interface that year after year the insurance companies have to face and especially the numerous tools that have been developed by the latter in the insurance and reinsurance field for the natural hazards