For as long as weather and natural catastrophe risks have existed, insurers and reinsurers have been responsible for the commercial assessment of natural disasters, primarily through underwriting and reserves management.
Today, amid increasingly devastating consequences and rapidly rising costs of climate-related perils, (re)insurers are expected to play a larger role in helping society mitigate the effects of climate change, build resilience to its effects and support the transition to a low-carbon economy.
(Re)insurers have an opportunity to lead on these issues and strengthen their position in the marketplace by taking an enterprise-wide approach to climate change, not only when it comes to underwriting but also on investment decisions.
Climate change is going to affect different parts of the business, so it is important to take a holistic view of the business approach.
By understanding and managing climate risks on the assets and liabilities sides of the balance sheet and advancing climate-awareness in their own organizations, insurers can navigate climate change.