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Currently showing: Climate/natural disasters > Climate change

30 Aug 13 18:00

I just stepped out of a fishbowl – and I've got some good news and some bad news. But I'm getting ahead of myself...

Today, we're celebrating Swiss Re's 150 Years Anniversary, and we spent a great deal of this afternoon talking about risk. I joined a dialogue session with clients and stakeholders sitting in two concentric circles - forming a "fishbowl" - to discuss how we're going to create a "climate-resilient" world by 2050.

Five minutes into the conversation, I was reassured. All the experts present seemed to agree that we already have all the technologies, all the tools and all the science we need to stop global warming and manage the risks that climate change poses. All we need to do, everyone agreed, is to change the way we live. This means building smarter and strengthening disaster defences. That's the good news. The bad news is that change is not going to be easy, it's not going to be cheap and it's not going to be fast. In fact, by the time it happens - if it happens at all - it might be too late. And this is where the consensus started to fizzle and where one question led to another:

How do you change entrenched behaviours, practices and policies to better prepare for natural disasters and mitigate climate risk? Do you do it by political decree, through financial incentives, or by educating more people about risk? And who is responsible for affecting change? Can the insurance industry play a leading or will it simply follow?

Category: Climate/natural disasters: Climate change, Disaster risk


Paritosh - 31 Aug 2013, 3:06 a.m.

Educating people along with making alternatives available on a supermarket's shelf, would do a great job. The expensive alternatives present an enormous chance to insurance companies to lead from the front!

And maybe, move in to this non-core business (but profitable) of researching and manufacturing environment friendly gadgets, along with insuring them of course... what say?

james_greyson - 4 Sep 2013, 9:34 a.m.

I'd suggest we don't tackle climate change because we entirely mistake what kind of problem it is. It's understandable that 20 years ago climate change was identified as a problem of unhelpful behaviours making unhelpful technical choices, which make unhelpful climate effects. The curious thing is how decades of understanding the interconnectedness of the issues has led only to entrench this view. The complexity of the problem dynamics is assumed to mean difficult, expensive and slow solutions. This view is just herd thinking - equivalent in effectiveness to not attempting any solutions at all.

Climate change is a symptom of a limited set of systemic failures that cause a multitude of problems. The failures are relatively simple to identify and can be corrected any day that people choose to do so. The insurance industry could play a key leading role in at least one of these corrections but in my experience the industry seems rather trapped in solutions-as-usual. It would be a shame for an entire industry (and subsequently a civilisation) to be wiped out by complacency!

Peter Hausmann - 5 Sep 2013, 9:32 a.m.

I joined the same discussion but in a different group and I must admit we also failed to generate great ideas about how to approach this major problem. We agreed at least that you need awareness, incentives, and donations/subsidies to start to move the needle. And, that insurance is one of many useful measures required to improve the overall resilience.
In a nutshell: Mother nature will support us regarding "awareness" sooner or later because that's the way we learn best (unfortunately). To really move something in daily life "incentives" are key i.e. governments must act. The toughest one will be the financial transfer topic. We agreed that the technology is available but not the money. And, without financial support between countries and regions we will just fail. Not a very promising outlook, indeed.

Jennifer Rodney - 10 Sep 2013, 4:45 p.m.

Peter, do you think the insurance industry has a more active roll to take? For example via what it chooses to insure or how it chooses to charge? Financial incentives (both sticks and carrots) could be applied by the industry to support or financially dissuade projects that are seen as risk averse/environmentally friendly versus projects that don't take climate change into account (building in areas with increasing flood risk for example) or that go past a certain threshold of environmental damage via higher premiums or even refusing coverage?

Daniel Martin Eckhart - 12 Sep 2013, 11:59 a.m.

Industries won't change their models unless it makes monetary sense. Companies constantly evolve, innovate - because of money. It'll always be that. The moment new business case models practically guarantee higher returns than their traditional ways, they'll flock to it. That won't happen anytime soon.

We as individuals CAN make a difference and we must, every day. But large-scale it won't even be sufficient if governments subsidize. The only way large-scale change happens is by changing laws ... and that, too, can only happen if we first get money out of politics - WOLF PAC is trying to bring about that change in the US >

That, to me, is doable - change the political system so that our elected leaders lead in the best interests of citizens - then meaningful change can and will happen.

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