“Without a suitable enabling economic and regulatory framework, insurance risk management mechanisms are falling considerably short of their potential to deliver adaptation benefits,” said the UN Environment Programme Finance Initiative (UNEP FI) in a paper accompanying the statement.

“Our risk management initiatives are not having the impact they could have at present,” admitted Tom Bolt, director of performance management at Lloyd’s of London, which hosted the launch.

In addition to UNEP FI, the statement was also backed by three groups of insurers: the Geneva Association, The Munich Climate Insurance Initiative and ClimateWise.  “Insurers have much to offer but this potential can only be leveraged through a partnership approach with governments,” Andrew Torrance, CEO of Allianz Insurance and chairman of ClimateWise.

In particular, the statement says, insurers can support adaptation efforts by:

• using their expertise to put a price on risk and develop risk reduction and risk transfer systems;
• prioritising adaptation measures;
• incentivising loss reduction;
• developing new insurance products; and
• raising awareness among the industry’s stakeholders about the potential impacts of climate change and the adaptation needs of those most at risk.

The insurers call on governments to:

• implement the risk reduction measures agreed at the 2005 World Conference on Disaster Reduction;
• provide a suitable enabling framework for risk management and insurance to function at all levels of society;
• invest in reliable risk exposure data and make it freely available; and
• act on lessons learnt about the benefits of public-private partnerships and micro-insurance schemes which reduce losses for climate risks.

But the audience of insurers pointed to other significant obstacles to the initiative. Among their comments – given under Chatham House rules which prevents speakers being identified – were:

• that developing countries differ widely in terms of the assistance they require to develop risk management and insurance systems;
• demand for insurance must be stimulated from the ‘bottom-up’, yet many people in developing countries do not understand the risks they face; and
• responsibility for disaster risk management should be taken out of governments’ emergency planning departments and relocated within major ministries.

 Graham Cooper