Let me be frank. Most insurers are doing a pitiful job in responding to climate change. So it was nice to hear about two initiatives this week pointing to how the industry can make a more substantial contribution.
One came from Flood Re, the UK's flood reinsurance pool. The British government is proposing to allow households that claim on their Flood Re-supported policies to receive an additional sum to ensure flood resilience measures are included in repairs.
This means households can fund the extra costs for installing what are often simple devices, such as air brick covers and non-return valves on drains. If there is one peril whose severity is guaranteed to increase with global warming, it is flood, so this seems an eminently sensible strategy and a win-win for customer and insurer.
The other initiative, from Norwegian insurer Gjensidige, was also property related.
The firm has recently expanded its claims settlement terms on commercial and apartment buildings in Norway. If the building receives a BREEM energy efficiency certification when it gets rebuilt, Gjensidige will add 5% to the settlement.
Both of these initiatives are examples of "Build Back Better", a notion that has received a lot of airtime in discussions on post-Covid recovery plans.
But it's something insurers have largely failed to encourage, from a climate perspective.
ClimateWise, the UK-based initiative for insurers, noted in its 2019 annual review that "members did particularly poorly in identifying and disclosing areas of behavioural change needed to mitigate climate risks.
"Incentivising the right behavioural changes and providing risk mitigation incentives can promote the climate resilience of insurers and their customers/clients," the report says.
We can all benefit from sharing ideas on this, so drop me a message at [email protected] with examples of what your company has done, or could be doing, to improve climate resilience for their customers. I will update the article with your comments.