Paris climate change conference and its implications for insurance

These key issues debated at the Paris conference present both new risks and opportunities. The insurance sector can play an important role in both areas. But it needs to take a more proactive role and collaborate with other stakeholders to prevent some risks becoming uninsurable, safeguard its assets under management, and take advantage of new markets. This applies to general insurance and life insurance with pensions and investment, though the issues are somewhat different for the three sectors.

The research identifies two key challenges facing the insurance sector:

• The mitigation policies that have been put into place to reduce greenhouse gas emissions (GHG) - this process will transform the technologies that underpin our mode of life with consequent shifts in economic power between countries, and companies; and
• Adapting to extreme weather patterns - the current climate has become more extreme. As this pattern is expected to continue it implies greater risk for weather perils. In particular, Greenland ice-melt has created a huge temperature anomaly in the North Atlantic, raising the prospect of freakish conditions for the UK.

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