The re/insurance industry must be prepared to apply the lessons learned from the coronavirus (COVID-19) pandemic to the looming climate change crisis, according to Swiss Re’s CEO of Reinsurance, Moses Ojeisekhoba.
Writing in a blog post for Swiss Re, Ojeisekhoba argued that the clearest take-away from the pandemic is the need to act early when a crisis strikes.
This is evident in those countries that acted with decisiveness and studied previous events, which have proved far more resilient to the worst impacts of the coronavirus.
“We must apply these principles – building resilience through early action and careful planning by leveraging data and technology – in the battle against climate change,” Ojeisekhoba said. “Nothing is certain about the climate crisis but just as with COVID-19, we can’t wait for certainties. If we do, we’ll be too late.”
According to Swiss Re’s latest sigma report on natural catastrophes, the rate of uninsured losses is growing alongside the intensity and frequency of severe weather events, driven by global warming.
“As an industry, we must do more to ensure the world is better prepared to manage and mitigate the risks associated with such events,” Ojeisekhoba asserted.
For insurers and reinsurers, climate change could represent an opportunity to provide insurance protection to new markets and customers, but the Swiss Re exec believes further commitment and innovation will be required.
“We must let the early lessons of COVID-19 reinforce much of what we already know about how we respond, forcing each other to move quickly and adopt the approaches that lead to ever-more accurate mapping of risk,” he said.
“We need to leverage technology and evolve our underwriting models in order to understand patterns down to the local level. That way, we can open up insurance cover to many more businesses, people and public institutions.”
Swiss Re believes that the climate crisis will also require much more collaboration between the re/insurance industry and the public sector.
Industry data can help local and national governments invest in disaster risk reduction measures effectively, especially in areas prone to events such as flooding, storm surge and wildfires.
“Planning decision and infrastructure investments must be more strongly influenced by resilience criteria, and not solely based on economic grounds,” Ojeisekhoba continued.
“At the same time, data can help us improve how we quantify risk. It will allow us to move away from blanket area risk ratings and identify risk down to individual premises and locations.”
“But one thing is clear above all,” he concluded. “We must act now if we are to protect our planet and its people from climate change – one of humanity’s greatest threats, and if we get it right … greatest opportunities.”