Delaney joined Liberty Mutual subsidiary LSM from Environmental Resources Management (ERM) in August to help “increase the momentum behind [the company’s] ESG agenda”, the company said at the time.

And talking to The Insurer TV during the COP26 talks in Glasgow, Delaney said “the industry has got a number of things” to do to help manage the impact of climate change.

“There’s a recognition that some of our tools aren’t up to the job,” Delaney said.

“One of my colleagues put it as ‘reality has overrun the models’, and we do need to retool and make sure that we’re not simply relying on historical data for an exponentially different trajectory going forward,” she added.

Denise Delaney, Head of Responsible Business, Liberty Specialty Markets

At the same time, the industry must “do as much as we can towards decarbonization” and reduce its own carbon emissions. The industry also needs to develop additional new tools to help fill “the really big gap” that exists around the measurement and disclosure framework for the emissions within insurance and investment portfolios.

“It doesn’t really exist for our industry today,” Delaney said.

Furthermore, the new LSM hire said the industry will “continually need to be modelling the risk and translating that into mitigation action for our customers and clients”.

The industry has a major role to play in managing the impact of climate change, Delaney said.

“Climate change is one of the biggest transformations that we’ll see in our lifetimes, and the insurance industry has a really significant role to play, particularly as an enabler,” she said.

Denise Delaney, Head of Responsible Business, Liberty Specialty Markets 2

And Delaney highlighted the commitments LSM, and Liberty Mutual more broadly, has made to managing climate change and transitioning to low carbon emissions.

“In terms of emissions, we’ve committed to reducing our own operational emissions, and that’s a 50 percent target by 2030 against a 2019 baseline,” said Delaney.

“We’ve also joined the Partnership for Carbon Accounting Financials, or PCAF, and that’s doing some really important work to fill a really big gap around measuring and disclosing emissions within its insurance and investment portfolios.”

Last year, Liberty Mutual became the first US property and casualty insurer to sign up to the United Nations-supported Principles for Responsible Investment, and Delaney said the company is using its insights to integrate ESG into investments.

“We’re also really accelerating our work to get ESG embedded in how we underwrite business and really that starts with the energy transition,” she stated.