How can the insurance sector lead the UK’s green and equitable recovery?
“Insurers are right at the frontline in response to climate change” | Credit: PA Images
Speaking at the Chartered Insurance Institute’s event at Labour Connected, Shadow Exchequer Secretary to the Treasury, Wes Streeting MP, highlighted the significant role the insurance market can play in a green, sustainable, and just recovery.
“As climate breakdown occurs, we'll have a higher number of costly claims for insurers to deal with as a result of extreme weather events,” warned Shadow Exchequer Secretary to the Treasury, Wes Streeting MP, speaking at the Chartered Insurance Institute’s (CII) panel discussion at Labour Connected this week.
He described how the catastrophic climate breakdown will be far more disruptive that Covid-19.
“Future generations will curse ours,” he continued.
2020 has very much been a year of uncertainty and risk, themes well-known to insurers.
As attention slowly begins to turn to the recovery from Covid-19, how can we ensure a green, sustainable and equitable economic recovery and what role can insurance play towards achieving this?
That was the key question posed to the panel at the Chartered Insurance Institute’s event at Labour Connected, titled: The role of insurance in driving a green, sustainable and just recovery.
The event brought together a panel of industry experts and parliamentarians to discuss how insurers can better serve the needs of customers, particularly the most vulnerable, while also working towards a green and equitable economic recovery.
“Environmental, social and governance issues very much come naturally to insurers.”
Wes Streeting MP maintained that it was important for Government to have an “open conversation” with business, partly because of the important role that they can play with their clients and customers in working towards a green recovery.
“Leaders in the financial services industry have been slightly ahead of the policymakers on this,” he continued, celebrating the work that the insurance industry had already done to tackle climate change.
Having identified the concept of “climate risk” in the industry in 2009, insurers including Allianz and Zurich have been furthering the climate agenda, from funding academic research into environmental risks, to investing in green technologies and reducing their operational carbon emissions.
Dr Matthew Connell, Director, Policy & Public Affairs, CII said: “Environmental, social and governance issues very much come naturally to insurers.”
“In areas around sustainability like flooding, insurers have always taken a more long-term view, perhaps even more so than some governments,” he continued.
Ben Wilson, Director of Advocacy, Association of British Insurers agreed: “Insurers are right at the frontline in response to climate change.”
He also described the significant potential for the industry to further the climate agenda, because of the position of insurers as large-scale investors, “holding the power” to unlock investment in green assets and social infrastructure.
“With COP26 next year, this is a huge opportunity for the insurance industry to prioritise green investment,” he continued.
To do so, Dr Connell called for reform of the regulatory framework that allow insurers to invest more for the long-term, investing in a sustainable and well managed way.
He also highlighted that Brexit may bring opportunity to look at European regulations that we've inherited and see how they can be improved.
Ben Wilson stressed that the current regulatory framework around Solvency II works to “hold back” green investment.
An equitable recovery
Alongside the role that the insurance sector can play in a green recovery, the panel discussed how it can play a broader role in creating an equitable recovery.
Dr Connell described how the profession is in a unique position whereby it can notice things that are happening in society and “intervene in those areas in a way that really underlines their commercial interest.”
Wes Streeting MP stressed the need for insurance products to be available to meet the needs of the most vulnerable customers.
Shân Millie, Founder, Bright Blue Hare, said: “I think we can do a lot better being a risk partner, to the planet from the climate perspective, but also doing a lot better job with regard to vulnerable customers, and really making insurance a professional destination.”
Johnny Timpson, Cabinet Office Disability Champion and Chair, Access to Insurance Working Group, spoke of the importance of intersectionality in improving diversity in the industry.
“We have to realise that people exhibit a range of characteristics,” he said.
On the concept of ‘vulnerable customers,’ Mr Timpson was clear that businesses need to treat people appropriately, and said it was wrong to label people in that way.
“People’s disabilities should not define them,” he explained
He said the issue was in fact one of access: “the problem that we need to tackle is the barriers that they face that stop them participating in our workplaces, being able to buy our products and services.”
“It is the role of the insurance sector to demonstrate leadership to the UK economy in delivering that,” he concluded.