RenRe’s Manson urges industry to accelerate collaboration with emergent carbon markets
The (re)insurance industry’s involvement in supporting investors and clients in the carbon markets is crucial for the nascent sector to reach its full potential, RenaissanceRe’s Jeff Manson has said.
Speaking to The Insurer TV during the Risk Mitigation Leadership Forum, RenaissanceRe’s head of public sector partnership and SVP underwriting discussed the “wild west” of risk in the emergent carbon market and the industry’s involvement in accelerating the development of this sector.
The world is facing unprecedented challenges which no one can solve alone, but as an industry working with the broader economy, the (re)insurance market can make a difference.
He emphasised the key values of knowledge sharing, collaboration and hope, urging the industry not to be afraid but to be proactive.
“We need to act now and together,” Manson said.
While there are risks which come with operating in a new space, there are also discrepancies between what is happening in the markets and the unfair perception that it is “untenable”, Manson said.
Every market has faced the same inherent risks in its fledgling stages and the reinsurance industry is therefore well versed in tackling these challenges as they develop alongside the maturing market, he added.
Closing the “knowledge gap” for both risk providers and bearers is the primary challenge that the industry will need to navigate, and the lack of “consistent regulatory approaches” will also pose challenges as the market evolves, Manson noted.
He also urged the industry to begin taking incremental steps as opportunities arise, as “waiting for perfect will be waiting too long”. Taking these smaller steps sooner will help accelerate the development of an effective, global regulatory framework.
Speaking of collaboration, he praised the Insurance Development Forum and the Tripartite Project Initiative for their ambitious work towards closing the protection gap through the transfer of risk knowledge from the Global North to the Global South to create lasting financial resilience.
He noted that already having 20 country projects in various stages of progress thanks to this public-private partnership is extremely encouraging, thus reinforcing the need for industry-led initiatives to bring the critical scale necessary to actualise significant and sustainable change.
Manson acknowledged the difficulties of collaboration between large groups and some of the extended timelines of choosing to work collaboratively. Although this does not come without frustration, “maintaining the course” is important, he said.
“Big ideas, big challenges take time,” he added.
Manson remains confident that we will see the fruits of those investments over time. He added that interest is only growing, with more people wanting to participate and more sovereign donors wanting to provide funding.
He suggested that the carbon market has the potential to become the “greatest stimulus to the world economy we’ve ever seen” if the (re)insurance industry is to provide the necessary backing.
The Insurer comment
There is a sense of urgency, a call to action from the industry to lead these projects on. Manson’s hope for the future and the crucial importance he places on cross-industry collaboration to realise the exciting potential of the market is reminiscent of the African adage: “If you want to go quickly, go alone. If you want to go far, go together”.
In this 10-minute interview, Manson discusses:
- How the carbon market can reach its full potential
- Closing the knowledge gap for both risk providers and bearers, as well as the lack of “consistent regulatory approaches”
- The market’s potential to become the “greatest stimulus to the world economy we’ve ever seen”