Insurers urged to take action on underwriting to fight global warming

Insurers are being urged to take action on their underwriting, to help the fight against global warming.

A new paper from insurance leaders’ group ClimateWise detailed how insurers can support the transition to a net zero economy.

ClimateWise is a Cambridge University-based research group that supports insurers and the wider financial services sector with reports and recommendations to help combat climate change. 

The report, titled Insurers in Paris-aligned climate transition: Practical actions towards new zero underwriting,  stated that ”the insurance industry could support and steward the transition to a low carbon, resilient society through incentivising stakeholders and taking practical actions on underwriting activity”.

To boost net zero underwriting practices, the report recommended: 

• Setting boundaries for emission scope for the insurance industry. 
• Measuring net zero alignment with carbon footprinting, transition pathway evaluation and temperature scores.
• Understanding net zero implications for each insurance line of business. 
• Reacting to different insured client, asset and activities. 

Aon’s global chairman of reinsurance solutions Dominic Christian said: ”As net zero commitments develop for the insurance industry from our operations, to investments and now underwriting, business policies and [the] approaches needed will reply on collaboration across the insurance value chain.”