After a year of disasters (documented in detail here), the reinsurance industry travelled to Monte Carlo for its annual get together (8-14 September).
Hurricane Irma was accompanied last year by Hurricanes Harvey and Maria, along with earthquakes in Mexico and wildfires in California. In all, there was $136bn of insured losses from natural and man-made catastrophes in 2017 according to Swiss Re, the third highest on record.
A report, “Climate Change and the Insurance Industry: Taking Action as Risk Managers and Investors”, was written by Maryam Golnaraghi, Director, Extreme Events and Climate Risk research programme for The Geneva Association, which is described as the industry’s leading thinktank.
It notes that following the adoption of the Paris Agreement, there has been a burst of initiatives and activities across a wide range of stakeholders to support the transition to a low-carbon economy (mitigation side).
Latest developments include:
- growing but highly fragmented and in some cases conflicting climate policy and regulatory frameworks at national to local levels and across regions;
- innovation in clean and green technologies, with some gaining market share;
- rising interest in green financing, with efforts to reduce barriers to green investment on the part of shareholders, asset managers, standard-setting bodies and rating agencies, and growing demand for low-carbon commodities.
As well as building financial resilience to extreme events and other physical risks by providing risk information, improving distribution channels and payout mechanisms, Ms Golnaraghi reports that the insurance industry is supporting the transition to a low-carbon economy through its underwriting business, investment strategies and active reduction of its carbon footprint.
There is no reference to this support in the FT’s report of the insurance industry’s response to escalating disasters, summarised as:
- ‘a wave of merger and acquisition activity’ as insurers and reinsurers reconsider their business models,
- some are ‘bulking up’,
- others have decided to get out.
Reinsurance companies should call for immediate greenhouse gas mitigation efforts, as climate change continues to progress and extreme weather is becoming more frequent and dangerous and heed the Environmental Defense Fund warning that if these are not ramped up, last year’s unprecedented disasters may soon become the norm.
Mary Robinson fails to mention the corruption and self-serving that has characterized the “elite global agenda”
Millions across the world feel that the current globalised system is not working in their best interests. From unemployed former steel workers in the US rust belt, to the small island states in the South Pacific where livelihoods are threatened by climate change, people are angry that decisions taken by governments and in corporate boardrooms appear blithely indifferent to their daily struggles. We know from history that crude populism offers no real solutions, creating only false hope and scapegoats. Yet it is also clear that there are many politicians who will cynically exploit genuine grievances for their own ends”.
She ended by calling on citizens across the globe to trust their best instincts and work together for justice, but thoughtful commentators pinpointed omissions which underlie the uneasy reaction of some readers (extracts follow, all links added).
John Bruce addresses Ms Robinson: “With immense respect the air in your ivory tower isn’t what the rest of us breathe”
This article epitomises the views of a human being with a great heart but so out of touch as not to begin to understand the realities of life as understood by those who voted Brexit, or for Trump, or who are, and will be, powering the whole ground swell of global discontent.
It is not about leadership per se, but its abuse in pursuing greed over decency and values
Simon elaborates: This tip of the hat to the discontent of the “Millions across the world” seems well intentioned. But Robinson fails to embrace the significant corruption and self-dealing that has characterized the “elite global agenda”.
Yes, in theory globalization offers much promise, but its idealistic promoters have inexcusably turned a blind eye to abuses, distortions and fraud in globalization’s execution. All too frequently, dissent has been brushed aside as populist ignorance.
Globalization’s idealistic leaders (The Elders?) have lost credibility precisely because they have failed to call out the “fellow traveler” profiteers in their own ranks, and likewise been cheerleaders to globalization’s stark imbalances.
John Bruce continues: One price of this has been consumerist capitalism – a policy to enrich the wealthy at the expense of the not so well.
The mechanism has been education to a belief that “I shop therefore I am” – all on the back of expensive debt to the individual, supplied at near zero cost by institutions which, in a free market, would no longer be in it.
That is the cause of disaffection and it threatens revolution. Corbyn is right 20/1 is a pay ratio the civilised world needs to adopt or, had we still been here, the future would have been a time of immense violence – politics by other means to get rid of the oppressive mortmain on the lives and aspirations of the many by the protected and privileged few. An elite whose leadership has long been to protect the status quo and vested interest. Not something anyone with the power to do anything wishes to change.
The deep entrenchment of such leadership, based on the comfortable misconception of its beneficiaries, that the answer to poverty is simply to make the rich richer and it will simply trickle down, has come to put humanity at risk never before faced.
The second price to be paid for consumerist capitalism is its carbon footprint
Nature has the capacity to re-cycle 280 – 300 ppm carbon pa (note Keeling). The system has been out of control since about 1980. Now, 40 years later and in absence of intervention – to make clean energy to put coal oil and gas out of business and convert current engines to run clean – we have no future.
It is, on the evidence, that stark. But just as the conventional wisdom was wrong in thinking the RMS Titanic couldn’t sink so today we no less deliberately deny ourselves the reality, preferring a delusion which allows us to think that by cutting carbon we can remain below 1.5C.
Bruce ends prophetically: “What drives our weather will set our destiny.”