Underwriting is an important part of fighting climate change, says climate research group
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.”
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