Mitigating climate risk and advancing the energy transition
The effects of climate change are already evident and impacting our risk landscape: warmer average temperatures, rising sea levels, longer and more frequent heatwaves, as well as more weather extremes. These phenomena are becoming the new normal and will increasingly impact our way of life, our health and our natural environment. Urgent questions we need to ask are how to tackle climate change, how to advance the transition to renewable energy, and how we can best adapt to and mitigate climate risk.
In 2019, our stakeholder dialogue on this 2030 Sustainability Ambition included the following highlights:
- We attended the UN Climate Action Summit in New York and signed two important commitments: the UN Global Compact Business Ambition for 1.5°C (see Towards decarbonising our business model) and the UN-convened Net-Zero Asset Owner Alliance (see How we engage). In addition, the Insurance Development Forum (IDF) announced a series of coordinated commitments with the UN Development Programme, Germany and the UK to increase insurance protection in climate-exposed countries. Swiss Re has endorsed this commitment together with a number of peer companies.*
- We hosted the fourth annual Oasis conference in Zurich. Oasis is an open-source catastrophe modelling platform that eases the exchange of models in the re/insurance industry. It reflects the industry’s willingness to join forces and control rising costs by providing access to new and existing model providers, ultimately enhancing the diversity of models and risk views.
- We contributed our know-how to the development of the 2019 Task Force on Climate-related Financial Disclosures (TCFD) Status Report, as well as hosted the Industry Stakeholder Workshop convened by the International Association of Insurance Supervisors (IAIS) and the Sustainable Insurance Forum (SIF) on the “Implementation of the Recommendations and Guidance of the Task Force on Climate-related Financial Disclosures and Supervision of Climate Change Risks” event.
- We produced the sigma issue 2/2019: “Secondary natural catastrophe risks”, which took a look at global insured losses from natural catastrophe events, as well as provided a detailed analysis of the “secondary” effects of primary perils. While underwriting catastrophe risks means looking at peak risks, increasingly it also requires taking into consideration forward-looking trends on secondary perils.
- Swiss Re’s Chairman Swiss Re Institute and Group Chief Underwriting Officer, Edi Schmid, published a blog titled: “Averting a collision course with climate change”. This article emphasised how climate change and urban growth are impacting weather-related disasters and underinsurance, as well as how efforts must converge with broader actions on climate change and support more sustainable business models.
- We contributed to the Chief Risk Officer (CRO) Forum Emerging Risk Initiative position paper titled: “The heat is on – Insurability and Resilience in a Changing Climate”. The aim of the paper was to provide the insurance sector, risk professionals and other stakeholders with a clear understanding of climate change implications for the re/insurance industry, and to help equip them to challenge their businesses and clients in their responses to climate change.
* Further companies that have initially endorsed the IDF commitment are: Allianz, Aon, Axa, Munich Re, Renaissance Re, Scor, Willis Tower Watson.