In a recent discussion with Climate Change UN, Christian Mumenthaler, Chief Executive Officer of Swiss Re, explored how the re/insurance industry is an invisible force which holds the world together and allows economies to run.
During the exchange, Mumenthaler said: “It’s not just Swiss Re, I think the whole insurance and reinsurance industry is really acting as a shock absorber for the world, that’s their role.
“They take risks everywhere, they diversify risk and therefore allow people to construct bridges and fly with aeroplanes.
“And, I think, by our nature, assessing risk is at the core of what we do and therefore with all the scientists we have, relatively early we saw this as a potential threat, climate change,” he added.
He explained that it’s not just Swiss Re that’s talked about climate change risk, but lots within the re/insurance industry who have been having the same discussion for years.
At the beginning of this year, Mumenthaler said he has “high hopes” that big re/insurance companies can reach their target of net zero carbon emissions by 2050, but the hardest challenge of the net zero pledge would involve getting the upstream and supply part of the value chain to meet carbon targets.
Mumenthaler explained: “So, we saw it coming, we talked a lot about it. We have different roles we play, one is obviously putting a price to risk which helps mitigate some of the risk. We transfer risk, which is helpful for society.”
He explained that Swiss Re is also a big institutional investor, because the premiums it receives typically remain on average five to seven years in its balance sheet and need to be invested.
“So we’re big institutional investors on top. And, therefore, there’s different things we’re doing for society in both mitigating risk but also increasing the resilience.”
He went on to note that re/insurers are working with hard to abate sectors such as shipping, aviation and steel, throughout the whole value chain, to help get to zero emissions as fast as possible.
“I’ve been in this area for like 15 years and I’ve never been so positive as I am today, because things are changing very fast. I really think we’re at the tipping point,” he concluded.