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From Debate To Action Shift07 Oct 07


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Climate change will alter customer needs and expectations, both consumer and business. Government and business need to respond.

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From Debate To Action Shift07 Oct 07

  1. 1. From debate to action: engaging government, business and consumers in tackling the causes and consequences of climate change Jane Milne Association of British Insurers
  2. 2. Summer 2007
  3. 3. Anticipated insurance losses
  4. 4. Adaptation responses needed <ul><li>Habitable housing </li></ul><ul><li>Flexible commercial buildings </li></ul><ul><li>Risk based development </li></ul><ul><li>Reliable transportation </li></ul><ul><li>Secure energy supplies </li></ul><ul><li>Safe and secure water supplies </li></ul><ul><li>Well educated workforce </li></ul><ul><li>Healthy people </li></ul><ul><li>Resilient trading partners </li></ul>
  5. 5. 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%
  6. 6. What are you prepared to do to manage your risk? (YouGov, August 2007, 2012 respondents) 67% 67% 59% (35%) Windstorms (23%) 26% 20% 24% Subsidence (8%) 53% 53% 43% (21%) Heatwaves (27%) 32% 23% 26% (12%) Flooding (16%) Most active region Most ‘at risk’ region Average UK Measures against:
  7. 7. Who would you trust to give you advice on protecting your home from bad weather? (YouGov, August 2007, 2012 respondents) Government 33% 84% Environment Agency 61% Local authorities 39% 64% Fire and Police Services 57% Insurers 22% 51% Mortgage lenders 8% Water companies 21% Gas companies 12 %
  8. 8. Customers’ needs – personal lines <ul><li>Two thirds of people say preventing climate change is their responsibility </li></ul><ul><li>Around 6 out of 10 people say protecting the UK from climate change is their responsibility </li></ul><ul><li>Around 4 out of 10 customers say they want climate-friendly products </li></ul>
  9. 9. Engaging with government <ul><li>EU Adaptation Green paper and UK Adaptation Framework </li></ul><ul><li>UK Climate Change Bill </li></ul><ul><li>UK Government Spending Review </li></ul><ul><li>Thames and Humber strategies </li></ul><ul><li>Housing Green Paper </li></ul><ul><li>Code for Sustainable Homes </li></ul>
  10. 10. Customers’ needs - commercial <ul><li>Only one quarter of SMEs think climate change will affect their business….. </li></ul><ul><li>… ..but two thirds of those which have suffered a flood said their insurers helped them deal with it </li></ul><ul><li>98 of the FTSE100 identify climate change as a business threat (80% of FTSE500) </li></ul>
  11. 11. New market opportunities £33.5bn carbon trading market could give rise to a significant insurance market, including guarantees for CDM delivery Higher uptake of Household and SME insurance                                                                                 £450m-£1.3bn p.a. in industrial renewables
  12. 12. Communicating climate risks <ul><li>People identify with local, recent events that they can imagine happening to them </li></ul><ul><li>They deal with the ‘here and now’ and act if everyone else is acting </li></ul><ul><li>They look to sources of authority for advice, especially in a crisis </li></ul><ul><li>Politicians are nervous about getting too far ahead of their electorates – and business cannot ignore customers’ wishes </li></ul><ul><li>Journey together </li></ul>
  13. 13. An industry initiative <ul><li>Lead in risk analysis – and share our research </li></ul><ul><li>Inform public policy making </li></ul><ul><li>Support climate awareness amongst our customers </li></ul><ul><li>Incorporate climate change into our investment strategies </li></ul><ul><li>Reduce the environmental impact of our business </li></ul><ul><li>Report and be accountable </li></ul>
  14. 14. <ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul>