Global insurance industry group ClimateWise, convened by the University of Cambridge Institute for Sustainability Leadership, has released a white paper exploring the potential contribution of innovative insurance products in the transition to a net zero economy.
The report draws on the expertise of more than 10 ClimateWise members including Aon, Allianz, Aviva, AXA, Lloyds, Zurich, and makes recommendations to support the insurance industry’s meaningful part in the decarbonisation of the global economy.
Dominic Christian, Chair of ClimateWise and Global Chairman, Reinsurance Solutions at Aon said: “Although the insurance industry is changing that rate of change must accelerate, and innovative climate products must be developed so that industry can both enhance resilience and facilitate the transition.
Enabling low carbon choices
Several driving forces are shaping the demand and opportunity for product innovation towards net zero across the industry, including customers, policy makers and shareholders. These drivers have informed the white paper’s nine key priority areas for insurance product innovation to support climate mitigation and adaptation:
- Enabling and incentivising low carbon choices
- Mainstreaming the encouragement of climate mitigation through efficient and resilient reinstatement
- Implementing environmentally sustainable claims servicing
- Enabling capital flows towards green solutions through risk transfer solutions
- Creating removal-based carbon offsets through natural capital protection
- Scaling emerging and existing low carbon and net-negative technologies and start-ups
- Supporting the sustainable decommissioning of carbon-intensive assets
- Developing risk advisory services to support clients’ climate mitigation understanding and approach
- Developing solutions for increasing climate legal liability and environmental litigation
Bronwyn Claire, Senior Programme Manager at ClimateWise said: “Our aim, as ever, is to support the insurance industry as it addresses the opportunities and challenges of global change, and to ensure that the deep expertise held across the insurance value chain can be effectively harnessed to enable the transition.
“The priority areas identified in this paper, along with the exploration of barriers to innovation, will serve as an excellent springboard from which to advance our collective progress.”