Prince of Wales launches insurance task force to fight climate change

Written by Adam Cadle

24/06/2021

At the invitation of the Prince of Wales, Lloyd’s has brought together leaders from a number of the largest and most influential global insurance firms to form an Insurance Task Force (ITF) as part of the Sustainable Markets Initiative, to drive progress as a group and accelerate the pace of industry transitions towards a more resilient and sustainable future.

The ITF, chaired by Lloyd’s chairman Bruce Carnegie-Brown, has committed to supporting the global transition through delivering four key initiatives in 2021 that will provide innovative new insurance products and services, and critical financial and risk management support across a number of industries and geographies to drive positive change. The initiatives are as follows:

1. Driving insurance product and services innovation to empower commercial customers to develop, invest in and scale their sustainability initiatives, supporting green innovation across multiple sectors and geographies. As part of this initiative, the Task Force will launch at least two new insurance products to protect priority industries, such as nuclear energy, hydrogen and offshore wind, against an evolving risk landscape, in order to enable their accelerated growth.

2. Implementing sustainable processes across the insurance supply chain to encourage and incentivise individuals to take positive actions to live more sustainably. This will include launching an industry-wide framework to drive sustainable outcomes for customers, for example through introducing “build back better” claims clauses in home insurance policies to encourage customers to rebuild damaged properties with more sustainable materials in support of a net-zero transition.

3. Establishing a public-private disaster resilience, response, and recovery framework to help protect developing nations from the evolving economic and societal impacts of climate change, including the effects of increasingly frequent and severe weather events. The framework will leverage the insurance industry’s unique ability to combine an insurance product with risk management and loss recovery services, in order to increase preparedness for and limit the impacts of these events. Once developed, this solution will be rolled out across vulnerable countries to support better disaster response and recovery, with a pilot being initiated in 2021.

4. Developing a framework for accelerating and scaling sustainable investment to help unlock the global (re)insurance industry’s more than $30trn in assets under management, increasingly directing capital towards investments that drive climate-positive outcomes in both developed and developing nations. As part of this initiative, an investment proposal will be developed through collaboration between public and private sectors, with a particular focus on renewable energy and climate transition assets to enable the transition towards a low-carbon economy.

The ITF will align with existing initiatives to accelerate activity and deliver tangible progress over the course of 2021, and ahead of the 26th UN Climate Change Conference of Parties (COP26) in November 2021, which marks a significant milestone in global efforts to combat the impacts of climate change.

The Prince of Wales said: "The insurance industry is exceptionally well placed to understand the impact of climate change and the damage it can cause to us all if we don’t take action now. This is why I am so pleased that a large number of the world’s leading insurance companies have joined together to identify how the insurance industry can help put Nature, People and the Planet at the heart of our entire economy."

The ITF’s members are drawn from across the global insurance industry, including: Peter Zaffino CEO and President, AIG; Oliver Bate, CEO, Allianz; Scott Purviance, CEO, Amwins; Greg Case, CEO, Aon; Dominic Christian, global chairman, Aon Reinsurance Solutions; Andrew Brooks, CEO, Ascot; Sean McGovern, CEO UK & Lloyd's, AXA XL; Adrian Cox, CEO, Beazley; Neil Eckert, executive chairman, Conduit Re; Penny James, CEO, Direct Line Group; Bronek Masojada, CEO, Hiscox; David Howden, CEO, Howden; Ekhosuehi Iyahen, secretary general, IDF; Nigel Wilson, CEO, Legal & General; John Neal, CEO, Lloyd's; Dan Glaser, CEO and president, Marsh Mclennan; Joachim Wenning, CEO, Munich Re; Andy Briggs, CEO, Phoenix and Brad Irick, CEO, Tokio Marine Kiln.

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