Tomorrow will mark a pivotal day in the COP26 schedule from an insurance perspective, with the event’s “Finance Day” providing an opportunity for the industry to highlight the role it can play in helping address challenges around climate change.
The industry’s role will face scrutiny. While insurers will gather at the event to present their plans to target decarbonisation through the Net Zero Insurance Alliance, the Insure Our Future campaign will be launching its latest scorecard highlighting “leaders and laggards” within the industry.
While the industry can expect scrutiny of its insurance of fossil fuels to continue, the COP26 discussions represent an opportunity to highlight the role the industry can play in supporting climate resilient growth and development.
The industry’s toolkit enables it to develop mechanisms that can help support the countries most vulnerable to climate change adapt and build resilience to catastrophic loss events.
Discussions at COP26 are an important opportunity to help align finance with local adaptation and resilience goals. New protection systems will be required to help protect vulnerable communities against future risk. The insurance sector brings the expertise that can help develop these solutions.
The challenge remains bringing those solutions to scale. While multiple pilots are launched each year for adaptation solutions, many struggle to get beyond the pilot stage and reach the necessary scale.
As we highlight in today’s update, there is increased interest in ex-ante – before the event – financing rather than post-disaster response. And the recognition of insurance as an important tool in disaster risk management is also growing, as we explore in today’s edition of The Insurer’s COP26 daily bulletin.
The headlines from today’s talks in Glasgow have focused on an agreement by governments to halt deforestation. More than 100 political leaders, representing over 85 percent of the world’s forests, agreed to reverse forest loss and land degradation by 2030.
As we report in this edition, three insurers – Aviva, Axa and Scor – are among the financial institutions who have committed their support to end investment in agricultural commodity-driven activities linked to deforestation by 2025.
In this edition we also hear from Aon’s head of catastrophe insight, Steve Bowen, who highlights how this year’s weather events carry “hallmark” of climate change, with the industry now developing “varying levels” of confidence regarding how climate change is influencing certain perils.
Look out for our continued coverage of insurance-related news to emerge during tomorrow’s “Finance Day” as well as the remainder of COP26.