International insurance chiefs formulate strategy to pressure governments over climate threat
The global insurance industry is set to bring pressure on world governments to ramp up efforts to tackle the threat of natural catastrophes brought on by climate change.
The chief executives of 80 of the most powerful insurance companies in the world, as members of the Geneva Association think tank, have developed a united response that governments should act on.
At the association’s annual meeting in New York, the members criticised world governments for not doing enough to prepare for natural disasters linked with climate change.
It said governments needed to shoulder more responsibility rather than relying on the insurance sector.
In 2006, there were 349 natural catastrophes worldwide, costing insurers $11.8bn, according to Swiss Re.
Managing director and secretary general of the Geneva Association, Patrick Liedtke said the insurance industry must brace itself for larger catastrophic events but should not be expected to carry the burden alone.
He said: “All key scientific infor-mation we have points to more serious problems surrounding climate change in the decade to come. But we don’t have a system in place to give incentives to politicians to adopt more efficient means of dealing with catastrophes.”
The association said governments could implement simple measures to mitigate the damages caused by natural disasters.
These include: implementing building codes; allowing insurance companies to price according to risk; preventing residential developments in flood plains, fault lines and other high-risk areas; developing stronger storm run-off systems; and cleaning out forest waste to avoid the spread of fires.
Walter Stahel, the Geneva Associations’s director of risk management and research, said because natural disaster and storm insurance is renegotiated annually, insurance companies can raise premiums every time disaster strikes.
“This is why it falls to governments because they really are the insurers of last resort,” he said.
The Geneva Association, whose current president is Henri De Castries, chairman and chief executive of AXA Group, is not a lobbying group. It provides international insurance companies with the tools and research to pressure governments for change.