Insurers are steadily taking climate change into account when developing or adding to insurance offerings. A new report from Ceres outlines the 640-plus climate-related insurance initiatives worldwide. But while that number has jumped drastically in recent years, Ceres said it's not increasing fast enough.
Ceres, a U.S. coalition of investors and environmental groups, released it's latest report looking at climate-focused insurance, "From Risk to Opportunity: Insurer Responses to Climate Change," (
PDF) this month.
It looks at 643 products and services from 244 insurers, reinsurers, brokers and insurance organizations in 29 countries. Almost 40 percent of all the activities are from U.S. companies.
Among the hundreds of new offerings are coverage for green buildings, renewable energy shortfalls, carbon capture and storage, lower vehicle emissions and humanitarian emergencies prompted by drought.
There are 24 companies offering pay-as-you-drive insurance, giving discounts up to 60 percent for those who drive less than average drivers. Fireman's Fund developed the first replacement-upgrade product for hybrid cars, and numerous others offer incentives or discounts for hybrid, fuel efficient and low-emission vehicles.
Green building-related insurance now comes from 22 companies, and their 39 products cover both new buildings and upgrades related to losses or regular renovations. They cover a range of green building features, including credits and discounts related to recycled materials, energy-efficient products, green roofs and business interruption.
Five companies have introduced coverage for renewable energy providers that face shortfalls in solar, wind, or geothermal energy production, which would help companies attract investment and financing.
And last year saw the first products developed to manage risks related specifically to carbon capture and storage.
Although a wider swath of offerings covering numerous areas and industries is a positive advance, the report says it still has a long way to go.
"The scope and breadth of the insurer response fails to match the scale and urgency of the risks-or the opportunities-facing the industry," said Mindy Lubber, president of Ceres. “Insurer attention to climate change is hugely important because the insurance industry underlies every aspect of the economy and has the power to transform the global energy system to one that is cleaner and more sustainable."
Climate concerns are being ingrained into insurers in other ways as well. Just in March the National Association of Insurance Commissioners decided it will require insurance companies to disclose financial risks they face from climate change, and what they are doing in response to thise risks, to regulators and investors.
Constuction - CC license by Paul Keleher
