Disaster insuranceU.S insurance sector showing “profound lack of preparedness in addressing climate-related risks”: Report
Amid growing evidence that climate change is having wide-ranging global impacts which will worsen in the years ahead, a new report ranks the nation’s 330 largest insurance companies on what they are saying and doing to respond to escalating climate risks. The report found strong leadership among fewer than a dozen companies but generally poor responses among the vast majority. “Despite being on the ‘front line’ of climate risks, most of the company responses show a profound lack of preparedness in addressing climate-related risks and opportunities,” says the president of the organization sponsoring the report.
Amid growing evidence that climate change is having wide-ranging global impacts which will worsen in the years ahead, a new report from Ceres ranks the nation’s 330 largest insurance companies on what they are saying and doing to respond to escalating climate risks. The report found strong leadership among fewer than a dozen companies but generally poor responses among the vast majority.
The report, Insurer Climate Risk Disclosure Survey Report & Scorecard: 2014 Findings & Recommendations, ranks property & casualty, health and life & annuity insurers which represent about 87 percent of the total U.S. insurance market. The companies were ranked on a half-dozen climate related indicators, including governance, risk management, investment strategies, greenhouse gas management, and public engagement (such as their climate policy positions). The report is based on company disclosures last year in response to a climate risk survey developed by the National Association of Insurance Commissioners (NAIC).
“Despite being on the ‘front line’ of climate risks, most of the company responses show a profound lack of preparedness in addressing climate-related risks and opportunities,” said Mindy Lubber, president of Ceres, a nonprofit sustainability advocacy group. “A big positive in the report’s findings is the strong leadership among a small number of property & casualty insurers — a trend that needs to become far more mainstream if the industry is to accelerate global responses to this colossal threat.”
The companies were ranked on a four-tier scoring system, based on a 100-point scale, which included “Leading,” “Developing,” “Beginning,” and “Minimal” grades. Nine of the 330 companies — three percent overall — received the “Leading” rank, including ACE, Munich Re, Swiss Re, Allianz, Prudential, XL Group, The Hartford, Sompo Japan, and Zurich. The Hartford and Prudential are the only U.S.-headquartered insurers among the nine firms.
The vast majority of the insurers — 276 of the 330 companies — earned “Beginning” or “Minimal” ratings. The health and life & annuity insurers had especially weak responses, with 89 percent and 80 percent, respectively, receiving the lowest “Minimal” rating.
