Sustainable insurance for non-life and life insurers

🚨 A big UN report just launched: A powerful global resource for insurers, reinsurers & brokers navigating the net-zero transition. “Underwriting the Transition” is the first-ever guide specifically tailored to help insurance and reinsurance companies develop and disclose credible transition plans for their underwriting portfolios. Why it matters: While insurers have made climate commitments, clear frameworks for underwriting strategies have been lacking. This guide provides that. What’s inside: - A structured framework for transition planning - A checklist to assess credibility - Real-world examples from insurers, reinsurers & brokers - Practical insights on disclosure, strategy, and implementation By moving from ambition to action, this report helps the insurance sector lead the way in building a resilient, inclusive, and net-zero economy reaffirming its role as society’s risk manager. 🌍 This is the second deliverable in United Nations Environment Programme Finance Initiative (UNEP FI)'s FIT Transition Plan Project — following “Closing the Gap” launched at COP29 and it lays the groundwork for the next report on total balance sheet guidance linking underwriting and investment strategies, to be launched at COP30. Let's make COP30 a defining moment for insurance climate leadership. #TransitionPlan #Insurance #Reinsurance #Sustainability #NetZero #FIT #UNEP #EIOPA #JustTransition #Underwriting

In my recent research on insurance and climate change, I looked into natural catastrophe (nat cat) loss prevention. Conventional insurance indemnifies ex post facto; it does not pay out in advance of a loss occurring and it does not usually cover the insured’s costs for pre-emptive loss prevention measures. Shifting the paradigm from compensation to loss prevention requires difficult conversations around individual and collective responsibilities and the allocation of costs. Whilst my research has centred around physical climate risks affecting property and business continuity, climate-related risks also negatively impact human life and health. Data collected by Generali shows that climate-related extreme weather events and long-term shifts in climate patterns increase mortality and morbidity as result of: ❗ Heatwaves: heat exhaustion, heat stroke, and exacerbation of existing underlying conditions ❗ Air pollution: exposure can lead to cancers, respiratory diseases and infections ❗ Vector-borne diseases: hotter and more humid climate conditions, and flooding, facilitate the development and activity of parasites, viruses and bacteria giving rise to vector-borne diseases A joint paper by Generali and the United Nations Development Programme (UNDP) sets out how private insurance can strengthen health and human development in changing climate conditions. In addition to investment in healthcare and increasing financial resilience with health and life insurance products, the paper also highlights the role of private health insurance in loss prevention: 💚 health protection plans that combine insurance with access to telemedicine platforms, diagnostic tools, or wearable technology 💚 premium pricing and service-based incentives that incentives policyholders to adopt proactive health or climate-resilient behaviors 💚 raising awareness of the health consequences of climate change and to encourage protective action amongst policyholders. Great to see that the UN/Generali's insights on loss prevention relating the climate health impacts chime with my proposals on nat cat loss prevention. With their risk management expertise, access to data, and leveraging new technologies and existing client relationships, insurers can expand their products and services into loss prevention (of nat cat property and climate-related mortality and morbidity) whilst pursuing long-term business growth. This could create a growing virtuous circle of loss prevention → enhancing insurability → reducing protection gaps → business growth → more loss prevention → greater insurability of more lives and assets in more regions → closing further protection gaps → long-term business growth etc. Links in comment. UCL Faculty of Laws

Sustainable Insurance: The Next Big Shift? 🌱 Sustainability is a strategic imperative shaping how insurers approach underwriting, claims, and overall risk management. But what does “sustainable insurance” actually look like in practice? Here’s a quick rundown: Next-Gen Underwriting: AI-driven risk models incorporating climate data and environmental metrics Premium incentives for businesses or homeowners who invest in eco-friendly upgrades Tech-Driven Claims: Blockchain-powered smart contracts enabling faster, parametric payouts AI-assisted photo apps to streamline property damage assessments and reduce paperwork ESG Mandates & Investments: Aligning with global regulations that demand carbon footprint transparency Shifting investment portfolios toward renewable energy projects and green infrastructure Collaborative Partnerships: Public-private initiatives to create disaster-resilient communities and share risk pools Industry-wide alliances sharing data and best practices to tackle extreme weather events The result? Greater resilience for policyholders, a reduced environmental impact, and an innovative edge in a rapidly evolving market. 🚀 What do you think? Have you seen any standout sustainable insurance solutions? Let’s discuss real-world examples, roadblocks, and ideas in the comments. 👇 #Sustainability #InsuranceInnovation #Underwriting #ClaimsManagement #ESG

I am happy to co-author this article with Beatrice WEDER DI MAURO, President of the CEPR - Centre for Economic Policy Research, reflecting on the urgent need to engage in collective thinking and action to adapt our response to the challenge of insurability in the face of escalating climate risks. This article, which captures key convictions from our joint workshop hosted at Collège de France by the AXA Research Fund and CEPR - Centre for Economic Policy Research, couldn't have been more timely.   Devastating floods in Valencia, the wildfires in Los Angeles, the typhoons in Mayotte and La Réunion... These recent climate catastrophes show a clear reality: climate risks are intensifying and the protection gap for local communities and economies are becoming evident. Global economic losses from extreme weather events reached $320 billion in 2024, while in Europe, only 25% of economic losses were insured - leaving individuals, businesses, and communities vulnerable.    To address this, we need to enhance risk-sharing mechanisms and promote partnerships between public institutions and private companies.   Ensuring insurance accessibility and effectiveness is crucial. This can be done through: ➡️ Hybrid models, combining market mechanisms with public-private partnerships, to help ensure broad coverage and affordability. France’s CatNat regime and Switzerland’s hybrid model offer valuable insights. These models can be adapted to regions facing extreme exposure, such as sea level risks. ➡️ Greater investment in prevention and risk-sharing mechanisms. Initiatives like local municipal risk assessments can help small municipalities assess and mitigate local climate risks. ➡️ Impact underwriting, where insurers incentivize policyholders to adopt risk-reducing measures in exchange for lower premiums. ➡️ Public education on climate risks and stronger coordination between insurers, governments, and consumers to ensure preventive measures are taken seriously.   As we move forward, it's clear that policymakers, insurers, and society must work together to strike a sustainable balance between affordability and fiscal viability. This is not just about who pays the bill. It is about how we manage risk in an increasingly uncertain climate landscape. Let's continue to foster collaboration and innovation to close the protection gap and build a resilient future. 👇 https://lnkd.in/er6BkrtZ

𝗜𝘀 𝘁𝗵𝗲 𝗳𝘂𝘁𝘂𝗿𝗲 𝗶𝗻𝘀𝘂𝗿𝗮𝗯𝗹𝗲? Climate change is reshaping the assumptions #insurance has relied on for centuries and with that comes both challenges and opportunities. This article explores how rising climate risks are influencing insurance markets built on historical risk models. Key points: ▪️    Climate risks are growing faster and more interconnected, challenging traditional assumptions ▪️   Coverage, premiums, and limits are adapting to these changes ▪️   Innovations like parametric insurance and risk-transfer tools are offering possibilities 𝗕𝗿𝗼𝗮𝗱𝗲𝗻𝗶𝗻𝗴 𝘁𝗵𝗲 𝗽𝗲𝗿𝘀𝗽𝗲𝗰𝘁𝗶𝘃𝗲 While the article focuses on property & casualty insurance, these trends extend across all lines. Life and health insurers are also adapting: 🔹 Climate change is influencing mortality, morbidity, and long-term health risks, shaping underwriting, pricing, and reserves. 🔹Actuarial models are evolving to better incorporate climate-driven trends and support innovative insurance solutions. 𝗢𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀 𝗳𝗼𝗿 𝘁𝗵𝗲 𝘀𝗲𝗰𝘁𝗼𝗿 ❇️ Integrating climate insights into all insurance products creates more resilient coverage ❇️ New risk-transfer mechanisms and parametric solutions make insurance more accessible and responsive ❇️ Collaboration with brokers, regulators, and public institutions ensures insurance remains reliable and relevant Insurance is ultimately about protection and recovery. For individuals, businesses, and governments, the evolving landscape highlights the need to plan ahead, invest in #resilience, and make informed decisions, helping people and assets recover faster from unexpected losses and keeping communities prepared and resilient. 🔗 https://lnkd.in/dCJ28Yjq #sustainability #climateaction #adaptation