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Insurers’ risk management skills should be embraced by governments

Insurance companies have the expertise and creative solutions to help governments reduce the impacts of climate change.

Last week, a global coalition of insurance companies urged governments to partner up and implement policy and financial frameworks that will allow insurers to help reduce the impacts of climate change on vulnerable communities, particularly in developing economies.

At present, many governments have still not implemented actionable policies for disaster risk reduction. Such policies could include appointing a national risk officer with the mandate to:

  • Create a holistic risk management culture;
  • Facilitate community, regional and national risk reduction activities;
  • Climate-proof existing infrastructure investments; and
  • Implement (and enforce) appropriate zoning and building codes.

The joint statement issued on Monday, September 6 asked governments to acknowledge the insurance industry’s inherent risk management skills by partnering with them.

Partnering, according to the statement, means creating an enabling environment in which insurance companies can operate effectively (i.e., providing “good corporate governance frameworks” and “systems necessary for financial market services to function at all levels of society and across appropriate time horizons”).

ACT is a strong supporter of such partnerships. It is our goal to bring together public-private organizations and government to identify policy opportunities and create actionable policy initiatives. In 2009, we worked with co-funders Zurich Canada and the BC Ministry of Environment to create our second policy publication, Climate Change Adaptation and Extreme Weather.

ACT will re-release the Extreme Weather report in October 2010 with updated statistics and recommendations based on current policy developments.

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