Everything that insurers do to limit plastic pollution and climate change will likely help reduce the frequency and severity of future claims. Their efforts can also show the industry as the force for good that it was always set up to be – supporting policyholders and beneficiaries through their times of need.
3. Achieve and drive regulatory change
Along with increased litigation against polluters, or those who fly-tip in the ocean, both regulators and insurers will likely become more sophisticated in the disclosure, quantification and management of climate risks. Inherent risks that are off the balance sheet today will quickly come to the surface, making it critical to go beyond merely ticking the box of compliance.
Government policy, however, is likely to be the single biggest driver of change. By getting behind the commitments that world leaders made at COP26, insurers can play a more proactive part in tackling ESG issues.
Challenges and opportunities
The environmental challenges ahead are huge, but they also give the insurance industry opportunities to raise its profile and lead by example.
The results of making changes will also cascade through all the corporations that insurers interact with, for a second wave of positive impacts on the sea, the land and the environment as a whole.
Martin Sarjeant is senior vice-president of product management, insurance at FIS
