Short-term Insurance
Strategic Risk Forum
Short-term Insurance
Strategic Risk Forum
Climate Change
and the
Insurance Industry
John Melville
Chairman: Strategic Risk Forum
10 June 2012
Short-term Insurance
Strategic Risk Forum
The Issue
• Climate change driven by rising carbon dioxide levels and the
greenhouse effect
• Climate change is driving
•
•
•
•
Rise in global average temperatures
Melting of polar ice caps
Increase in frequency of weather-related
natural hazards (storms and droughts)
Increase in frequency and severity of
natural disasters
Direct impact on the viability of insurance
Short-term Insurance
Strategic Risk Forum
Our Value Proposition
• Pool risk
•
Enables transfer of individual risk to collective
• Custodians of SA risk Pool
•
•
•
Understand risks
Influence behaviour of customers and investors
Ensure insurance industry continues to be
viable and affordable
• Key enabler of economic activity
Short-term Insurance
Strategic Risk Forum
The role of Insurance in the Economy
• A collective ‘safety net’ and a
lever of economic and social
development
• A key enabler and
transmission mechanism for
economic activity
• A catalyst in the financial and
investment flows needed for
sustainable development
Short-term Insurance
Strategic Risk Forum
The role of Insurance in the Economy
Without insurance, nothing is built, nobody works, nothing floats,
nothing runs on tracks, and nothing ships. But in addition to that,
nothing is repaired. It rebuilds lives, cities, and companies.
The World Trade Center would not be rebuilt without the insurance
industry, which pumped $4.4 billion into it.
Communities that are wiped out by hurricanes are rebuilt by the
insurance industry.
Joe Plumeri, CEO Willis Group,
Insurance Conference 2012
Short-term Insurance
Strategic Risk Forum
Our Responsibility
Reduce carbon
footprint and
encourage others
to do the same
This includes the
actions and
behavior of
individuals,
businesses, local
authorities, and
governments to
increase resilience
to risk
Promote actions
and behaviour that
specifically
increases
resilience to storm,
hail and drought
risk
Understand
vulnerability profile of
our insured landscape
in relation to storm,
hail and drought risk
Short-term Insurance
Strategic Risk Forum
Our Future
• Role of the underwriter will assume greater importance
• Only risks meeting necessary standards will be insurable
• Investment in underwriting capabilities allowing for climate change
will determine long-term success or failure
• Sustainability of insurance is vital from
economic perspective
+109590
Short-term Insurance
Strategic Risk Forum
Thank You
Short-term Insurance
Strategic Risk Forum