Planning for climate change: sustainable insurance

Jane Milne

Climate Change Leader

Association of British Insurers

Adaptation responses needed

•Habitable housing•Flexible commercial

buildings•Risk based development•Reliable transportation•Secure energy supplies•Safe and secure water

supplies•Well educated workforce•Healthy people•Resilient trading

partners

Which of these events is most important? (YouGov, August 2007, 2012 respondents)

Flooding 85% 16%

Drought/water restrictions 57% 32%

Heatwaves 40% 27%

Increased hay fever 28% 21%

Subsidence 26% 8%

Windstorms 23% 14%

Which of these events is most important? (YouGov, August 2007, 2012 respondents)

Flooding 85% 16%

Drought/water restrictions 57% 32%

Heatwaves 40% 27%

Increased hay fever 28% 21%

Subsidence 26% 8%

Windstorms 23% 14%

Likely insurance costs

Climate change and UK weather damage

02468

1012141618

£ b

illi

on

p.a

.

Today Average year

2040-2060s Averageyear

Today Extreme year

2040-2060s Extremeyear

Summer 2007

Extent of flooding – after 0.4m sea level rise

Coastlines at the front line

Hierarchy of choices for adaptation

Can site/properties be located outside the floodplain?

Can properties be located in the lowest flood risk areas?

Can occupied areas be raised above flood heights?

Are flood defences feasible/ cost effective?

Identify relevant property resilience options and examine alternative flood alleviation measures.

If not…

If not…

If not…

If not…

Managing risk

• Actions to prevent further climate change• Actions to protect us from inevitable climate change– community and regional planning – development planning– building design– product design– institutional behaviours– individual behaviours

Customers’ needs – personal lines

• Two thirds of people say preventing climate change is their responsibility• Around 6 out of 10 people say protecting the UK from climate change is their responsibility• Around 4 out of 10 customers say they want climate-friendly products

An industry initiative

• Lead in risk analysis – and share our research

•Inform public policy making

•Support climate awareness amongst our customers

• Incorporate climate change into our investment strategies

•Reduce the environmental impact of our business

•Report and be accountable

Reducing the risk for tomorrow