Due to global risks increasing, SCOR believes that the re/insurance industry has a key role to play in addressing current climate change risk challenges.
During September, SCOR took place in a webinar, where Michèle Lacroix and Laurent Rousseau looked at how re/insurers can take a proactive stance on sustainability and climate change, in terms of both asset allocation and underwriting.
Lacroix, who is the Head of SCOR’s Group Investment Office explained that financial markets are leading the way in the sustainability journey.
Stringent regulation over the last five years has meant that Corporate Social Responsibility (CSR) and Environmental, Social and Governance (ESG) are now common acronyms, with ESG being the three topics that underpin sustainability, which climate change is just one part of.
A huge part of re/insurers becoming more sustainable is through looking at their current portfolios. Lacroix explained that to limit global warming to 2 degrees or less, SCOR will need to become carbon neutral by 2050.
Lacroix commented: “10% of SCOR’s current portfolio contributes to 70% of emissions intensity, and we have room to manoeuvre on that 10% by supporting the best in class, those companies that are able to provide business and utilities in sectors that are carbon-heavy in a less harmful way.”
Rousseau, the Deputy CEO of SCOR Global P&C, commented on how the first consideration when it comes to underwriting and CSR at SCOR Global P&C is whether or not re/insurers are direct underwriters or if they’re underwriting risk on a single basis.
Throughout the webinar he noted how, although reinsurance and specialty insurance are different businesses, SCOR takes a unified approach with guidelines to frame its underwriting and manage exposure according to CSR and climate impact requirements.
Rousseau explored how on the reinsurance side, even if SCOR lacks a direct underwriting path, it still has a wealth of information on natural catastrophes, and this is where reinsurers have a real role to play. In providing society with data that is global and structured in historical series, to contribute to the understanding of natural perils.
Rousseau said: “We really want this approach to have an impact: insurance is the promotion of healthy practices and standards, and the incentive to practice better risk management.
“We have to be proactive in this regard, and we have taken a number of measures in this direction, such as the preservation of World Heritage sites, giving a global remit to the environmental liability Specialty that we write out of Lloyd’s, and our promotion of renewable energy.”