While the chatter at this year's Rendez-Vous de Septembre (RVS) in Monte Carlo was dominated by reinsurance pricing and casualty market developments, the themes of climate risk and sustainability continued to hum quietly in the background (occasionally breaking through the noise).
A key headline going into RVS was that global insured natural catastrophe losses are projected to average $152bn this year, according to Verisk's latest global modelled perils analysis.
That's a sharp jump from the $132bn five-year average recorded up to 2024. Verisk pointed to urbanisation, increasing event frequency and, importantly, the incremental impact of climate change, which it estimates adds around 1% year-on-year growth to average annual losses.
Speaking to InsuranceERM in Monte Carlo, Shane Latchman, vice-president and managing director of Verisk's Extreme Event Solutions team, said climate change is hitting some perils harder than others, with wildfires feeling a more disproportionate impact.
Climate change was also raised as a political issue at RVS. Scor CEO Thierry Léger warned the politicisation of climate change is making it harder for the re/insurance industry to manage the risks it faces. Asked by InsuranceERM whether political divides complicate risk management, Léger didn't hesitate: "It definitely does make it hard." He went further, describing climate change denial as an act of "utmost bad faith".
In comments from the major reinsurers, climate risk kept surfacing. It may not always dominate the headlines, but it is now firmly embedded in strategic and underwriting conversations across the market.
Away from Monte Carlo, regulatory issues took centre stage, as organisations fed back on consultations taking place over the summer break.
A flash survey by consultancy Crowe revealed wide variation in insurers' readiness for the UK's sustainability reporting standards.
At the same time, the Lloyd's Market Association (LMA) urged UK regulators to take a "proportionate and integrated" approach to climate risk rules. Speaking to InsuranceERM, Alex Koukoudis, senior executive for finance and risk at the LMA, said the association welcomed the Prudential Regulation Authority's (PRA) efforts but emphasised the need to balance ambition with practicality as the PRA prepares to finalise its supervisory expectations following the CP10/25 consultation.
In Germany, insurance association GDV has updated its guidance on incorporating climate change scenarios into insurers' Own Risk and Solvency Assessment (ORSA) processes, underlining the growing regulatory pressure to integrate climate risk into modelling and governance.
Meanwhile, Rachel Delhaise, head of sustainability at specialty re/insurer Convex, told InsuranceERM that insurers should fund and collaborate more closely with scientists to strengthen climate data and understanding. Her comments come as Convex's Seascape Survey – a collaboration funding research into how the oceans and climate are connected – moves into its third year.
And finally, the Partnership for Carbon Accounting Financials (PCAF) continues to expand. Admiral Group in the UK and LocalTapiola Group in Finland have joined the initiative, taking insurance membership to 38.