Two Degrees Off: The Implications Of Climate Change For Insurers

The 2020s modern-day enterprise is characterised by heightened operating uncertainty, coupled with the need to adapt to an ever-changing environment. Environmental, Social and Governance (ESG) captures a wide dashboard of goals that consider enterprise value beyond conventional financial considerations. Within these goals is the global ambition to limit the planet's temperature rise to not more than 2 °C (and ideally 1.5 °C) to stave off the worst effects of climate change¹.

Given their role of facilitating risk pooling and transfer, it is in insurers' interest to minimise the overall financial uncertainty of their policyholders. Increasingly, financial uncertainty is underpinned by environmental considerations, including climate change.