The insurance industry's collective professional insight and expertise, not to mention its combined financial assets, can add a great weight to the international discussion and agreement on climate change, disaster risk reduction and resilience, said HRH Prince of Wales.
Truly sustainable development has to be founded on the principles of resilience and the appropriate appreciation of risk, he said in his keynote address at the UN Financial & Private Sector Disaster Resilience Global Summit co-hosted by IIS and Willis yesterday.
Also emphasising the critical role that the industry can play was Mr Dominic Casserley, CEO, Willis Group. “We have the power to do something about the threats. The first step to managing risk is to identify it,” he said. The industry has the experience that can help the wider financial sector and the broader business environment to better evaluate the risks faced. “We should share that experience with the whole global economy,” he added.
One initiative that will trigger a major behavioural change in the way the private sector views risks would be the reporting of natural disaster risk and resilience by companies, said Mr Casserley. The articulation and dissemination by companies of the risks they face, can only lead to better allocation of capital. “The change that we are proposing today will create even greater incentives to understand risk and protect themselves against the risk and put in place the resilience that will give them the confidence to invest for the future,” he said.
“Climate change is here, and it is real. And this affects insurers very closely because in many cases, we finance the recovery and the rebuilding,” said Mr John Nelson, Chairman of Lloyd’s. This is an issue that the industry is taking very seriously.
“Insurance has a strong social value. We have the powerful instruments of premiums and policies which can, and will, help to build resilience in the system. So I’m optimistic that we can have an important impact in terms of making societies and communities across the world more resilient to climate change,” concluded Mr Nelson.