09.00
Keynote address: The insurers' role in building resilience and sustainability
09.30
State of play of the global climate response at an international, political and sector level
Update on the regulatory/political landscape
- Update on key regulation, policies and initiatives
- Task Force on climate-related financial disclosures TCFD
- Increased demand from regulators for investors to document how they are carrying out their RI process
- The TRUMP administration- what impact (if any), do we think Trump's decision to withdraw from the Paris climate accord and his policies will have?
Market landscape
- How fast do experts think the energy transition is taking place and what does this mean for us in terms of risk and opportunity?
- Data evidence of patterns of loss and relationship to climate change
- Likely impact on capital adequacy
Insurance landscape
- Changing perception of environmental risk - Where is the insurance industry now in terms of its understanding and tangible action?
- Understanding physical, liability and transition risks on both underwriting and asset side of the business
- Where are we in terms of integrating environmental considerations into the holistic business discussion?
- Progress towards improving modeling capabilities
10.00
The disruptive cascade effect of physical environmental risks: impact on insurance risk and global industry
- Which physical environmental risks pose the greatest risk in terms of likelihood of occurrence and impact?
- Understanding the interconnectedness of environmental risks - just how far reaching could the ripple effect be?
- Resulting operational risk - fallout and impact on the insurance and wider financial sector if we fail to correctly model environmental exposures.
- Insurance risk – potential impact as a direct result of climate risk – eg damage to property, business interruption risk, supply chain interruption and the domino effect.
- Rising premiums?
- Risk pooling?
- Uninsurable risks in the long term?
- Widening climate risk protection gap– who will pick up the pieces if insurance firms can't insure? Government as insurer of last resort?
- A CASE STUDY APPROACH TAKING 1 KEY PHYSICAL RISK – A SCENARIO ANALYSIS TO DEMONSTRATE THE POTENTIAL RIPPLE EFFECT AND ITS REPERCUSSIONS ON THE INSURANCE SECTOR, BUSINESS, FINANCIAL SECTOR, GOVERNMENT AND SOCIETY.
Speaker:
John Scott, Chief Risk Officer, Zurich
10.30
Coffee Break
11.00
Modelling physical environmental risks: the challenge of combining climate risk modelling with Nat Cat modelling
- The shortfalls of traditional risk measurement and management tools when applied to climate risk
- Where does the complexity mainly lie?
- To what extent do we think climate change is affecting weather patterns today?
- To what extent are other factors such as El Nino distorting the picture and masking the true impact of climate change
- Factoring in indeterminate/uncertain time horizons
- What approaches are insurers taking?
- Scenario modeling/disaster scenario modelling
- Stress testing
- Probabilistic modeling
11.30
Applying ESG criteria to the insurance underwriting business
- Identifying key sustainability risks in the underwriting business
- Key sectors at risk
- Key lines of business at risk
- Screening sensitive transactions for impacts and assessing extent of impact
- Embedding due diligence process in underwriting practice
- Abstain vs. engage
- Opportunities to contribute to positive change and enhance resilience
12.00
Analysis and feedback from a scoring exercise on the underwriting policies of 25 leading insurers in relation to climate change
Speaker:
Peter Bosshard, Finance Programme Director, The Sunrise Project
12.30
Lunch
13.30
Panel discussion: Steps towards incorporating ESG considerations into the investment decision
A panel of investment experts discuss approach, progress and challenges for the balance sheet.
- How far along in the journey are we to integrating environmental considerations into investment decisions?
- Consideration of the challenging low rate and global economic environment and restrictive regulatory framework – does this strengthen the case for incorporating ESG considerations or reduce it?
- Overview of policy adopted and why?
- Asset exclusion
- Engagement strategies
- Low carbon indexes
- Impact investing
- Investing in renewables
- Allocating capital via green bonds
- What impact does the integration of physical and transition environmental risks into the investment criteria have on the risk/return of a portfolio?
- Asset exclusion - what alternative assets can you invest in to replace it with?
- What opportunities do you see presented by climate risk?
- How do you take advantage of these opportunities without creating transition risk?
- Managing Transition Risk in the investment portfolio – walking the tightrope to bring about transition without creating transition risk
Moderator:
Michael Lewis, Head of ESG Thematic Research, Deutsche Asset Management
Panellists:
Jelle van der Giessen, Chief Investment Officer, NN GROUP
Johanna Kob, Responsible Investment Analyst, ZURICH
14.15
True asset valuation: stranded assets; assessing and addressing transition risk
- The current challenge of valuing assets
- How confident can we be that all assets are correctly valued on a company's balance sheet?
- What impact will the Recommendations Report by the Task Force on Climate Related Financial Disclosure (TCFD) have on our ability to measure carbon asset exposure?
- What dimensions do we need to bring in to our stress tests to make sure we are not pricing on a historical basis but rather truly reflecting the impact of environmental change on asset values, and the potential pace of change:
- macroeconomic and demographic variables, future policy implementation, technological developments, price and inputs of commodities
- Risk and impact of illiquid stranded assets: how imminent and significant could the threat of stranded assets be?
- Factoring in the risk of abrupt shocks in the context of transition risk - potential accelerators in the transition to a low carbon future and likely impact on transition risk:
- Policy changes
- Policy error
- Regulatory changes
- Technological breakthrough
- Pressure from activists and stakeholders to take a stronger position on carbon exposure and subsequent divesting of high carbon assets
- What skills and lessons can we take from our risk and underwriter colleagues' experience of modeling exposure?
- Impact of transition risk on the liability side
14.45
Panel discussion: Overview of opportunities for the insurer as a result of climate change
- Opportunity for insurers to use their unique understanding of both asset and liability sides of the balance sheet to help educate and inform other industries.
- Taking a competitive advantage in the move towards a greener economy - what are the opportunities for insurers and how do we position ourselves to access them?
- Product innovation as data improves
- Opportunities to break into emerging economies
- Creation of green bonds that minimize transition risk
- Investing in renewables
- Subsidy-free offshore wind farms
- Investing in new technologies to speed up the transition to low carbon environment.
- Importance of viewing opportunities within the context of risk – balancing the 2 and avoiding creating transition risk as a result of opportunities taken.
Panellists:
Dr. Tom Herbstein, Programme Manager, ClimateWise
Cynthia McHale, Director of Insurance, Ceres
15.30
Coffee Break
16.00
Panel discussion: Investing in renewables
- Redirecting capital into investments that can support the transition to a climate resilient economy
- How can regulation better support growth of renewable investment opportunities?
- What is the relationship between investment in resilience enhancing investments and underwriting profits?
- Managing the liquidity around investing in renewables
- Choosing the right time horizon
- Short term vs. long term environmental considerations
- Importance of local regulation
Panellists:
Matthias Seewald, Chief Investment Officer, Allianz
16.45
Panel discussion: investing in green bonds
Making green bonds more accessible
- Rates of green bond issuance
- Supply vs. demand
- Hindrance to growth of the green bond market:
- Lack of global standards for green bond issuance
- Growing risk of green washing
- Understanding similarities and differences between green bond definitions
- Lack of transparency over performance measures –how can investors better assess the impacts the bonds have on the environment?
- Better reporting metrics
- Quantitative key performance indicators
- Insurers as issuers of green bonds; QBE Green Bond Framework – can other insurers follow suit?
- Opportunities for issuance in emerging markets
Panellists:
Johanna Kob, Responsible Investment Analyst, Zurich
Miroslav Petkov, Director, Financial Services/Insurance, S&P Global
17.30
End of conference