THE global insurance industry has promised to lift its ‘climate-smart investments’ from $42 billion to $84 billion by the end of 2015, according to a report by Ross Kendall in the online journal Ethical Investor.
Mr Kendall reported that the global insurance industry, represented by the International Cooperative and Mutual Insurance Federation (ICMIF) and the International Insurance Society, was “set to transform its mainstream asset management by placing more emphasis on climate risk”.
Beyond next November’s UN’s Framework Convention on Climate Change in Paris, the industry has pledged to further commit to increasing the amount invested in climate-smart investments to 10 times the current amount, $420 billion, by 2020.
For the first time ever, the ICMIF and the International Insurance Society spoke as one voice at the UN’s Climate Summit in September, Ethical Investor quoted Shaun Tarbuck, ISMIF chief executive as saying.
“The insurance industry manages a third of the world’s investment capital – approximately US$30 trillion,” Mr Tarbuck said.
“As the most climate-risk aware sector in finance, insurers can lead the asset management world, by overlaying good capital disciplines to manage our own climate risk which must be understood and managed across all of our investments, and thereby creating the resilient cities, communities and assets we all desire,” he said.
The insurance industry is also reported to be creating and monitoring a Climate Risk Investment Framework that will become accountable under the new UN Hyogo Framework, which will impact significantly climate and disaster risk reduction and resilience.
“These are bold statements of intent. But as insurers we believe we start with a big advantage, because we are already in the business of protecting lives and livelihoods in both developed and emerging countries,” Mr Tarbuck said.
The mutual and cooperative insurance sector accounts for almost 30 percent of the insurance market, Ethical Investor reported, and is the fastest growing part increasing its premium income by 27 percent since 2007.
“Member-driven insurers put people and the planet, ahead of profit,” Mr Tarbuck said.