Andrew Horton, Chief Executive Officer (CEO) of specialist re/insurer Beazley, has said that he is confident that the market can adapt the potential impacts of climate change, and sees the climate challenge as an opportunity to explore new forms of coverage.
As part of the release of Beazley’s 2020 results, Horton said that the elevated levels of catastrophe losses that re/insurers have experienced in recent years are likely due in part to climate change.
While the extent to which climate change has aggravated these losses is difficult to assess given the limited data sets available, he believes that the impact of climate change is clearly discernible in some cases, such as the increasing severity of floods accompanying storms.
“At Beazley we have begun to explore these connections and their impacts on our business, including the opportunity to underwrite new forms of cover,” Horton said.
“I believe that, broadly speaking, the insurance market can accommodate climate change, given our ability to reprice policies annually, but the costs to the most vulnerable communities may ultimately become unsustainable.”
The Beazley CEO said climate change will be an area of increasing focus for the company in the coming years, and added that the opportunities around proving suitable cover, products and claims service is something that aligns with its current service model.
As part of this focus, Beazley is currently recruiting a sustainability officer, who will align the work done to date, and construct the company’s policy going forward.
“Beazley’s immediate focus is to deploy its traditional underwriting strengths to navigate what remains a turbulent market,” added Beazley Chair David Roberts.
“However, we are well aware that market conditions in the not too distant future will present very different challenges and require new strengths,” he noted. “I am confident that Beazley has the means and the will to adapt and navigate these changes.”
Roberts explained Beazley plans to investigate possible new climate products in collaboration with other re/insurance market players.
“The Lloyd’s market offers a tried and tested model for such collaboration and we will continue to work with other syndicates at Lloyd’s to push forward the boundaries of insurable risk,” he said.