Next week the International Cooperative and Mutual Insurance Federation (ICMIF) is to publicly endorse - during its Biennial Conference - a speech given by the Governor of the Bank of England, in which he urged the insurance industry and investors to help counteract the financial shocks that could be triggered by climate change.
ICMIF represents cooperative and mutual insurers from the fastest growing part of the sector which currently amounts to almost one third of the insurance industry (ref ICMIF’s Mutual Market Share 2014).
- ICMIF’s support for Carney will be announced during a full update on the progress of its Smart Risk investing project to more than 270 delegates from 35 countries at ICMIF’s Biennial Conference this October (6-9) in Minneapolis, Minnesota, USA.
- ICMIF has been working with the United Nations in a bid to increase Smart Risk investing in the insurance sector from USD 42 billion to USD 84 billion by the end of 2015.
- The global insurance industry, currently accounts for a third of the world’s investable assets (USD 30 trillion).
- The International Insurance Society (IIS) is also a partner in the project.
Carney told his audience at the annual Lloyd’s City Dinner (Tuesday 29 September), that climate change will “bring potentially profound implications for insurers, financial stability and the economy.”
He said that while there is still time to act, the window of opportunity is finite and shrinking, and he highlighted the upcoming United Nations Climate Change Conference, known as COP21, to be held in November, when 196 countries will gather in Paris to consider the world’s response to climate change.
In his speech Carney said that insurers are very exposed to climate change risks and that time is running out to tackle the challenges that climate change will bring about. He praised the insurance sector for having shown willing to confront the climate issue. “While others have been debating the theory, you have been dealing with the reality.”
Commenting on the Governor’s speech, ICMIF CEO Shaun Tarbuck said: “The mutual and cooperative sector has been quick to respond to recent calls from the United Nations, regulators and policymakers for leadership on the issue of climate change. We will step forward during the COP21 meetings and report on our progress relating to the Smart Risk investing project so far and our next steps. ”
The insurance sector has seen a tripling of the number of weather-related loss events since the 1980s. Inflation-adjusted losses connected with such events have risen from about USD 10 billion a year in the 1980s to about USD 50 billion a year during the past 10 years.
The Governor said it was likely that proposals would be put to the G20 meeting in Turkey in November of this year urging the world’s leading developed and developing countries to bring in harsher corporate disclosure standards which would enable investors to better judge climate change risks.