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Climate Change And The Insurance Industry

Even today, many sectors of the insurance industry do not regard climate change as a significant issue. However, research and analysis performed by progressive companies now see it as a fundamental that will affect not only the nature of insurance risk, but also public policy towards natural hazards. This paper will critically examine the reasons for the industry's tardy response to climate change and whether this response is likely to change in the near future. The paper will consider how public policy might evolve, and how insurance can form part of a broader program for natural disaster reduction, incorporating climate research, land use planning, and information strategies. It will explore the problems and opportunities that arise for the insurance industry from climate change, within the wider context of the industry's own internal dynamics, and external global economic change. Finally, this paper will discuss how best to capitalise on the common elements of the industry's divergent views, so that the transition to a more strategic approach occurs with minimal disruption.

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