From debate to action: engaging government, business and consumers in tackling the causes and consequences of climate change

Jane Milne

Association of British Insurers

Summer 2007

Anticipated insurance losses

Climate change and UK weather damage

02468

1012141618

Subsidence

Storm

Inland floodCoastal flood

£ billion p.a.

Today Average year

2040-2060s Averageyear

Today Extreme year

2040-2060s Extremeyear

Adaptation responses needed

•Habitable housing•Flexible commercial

buildings•Risk based development•Reliable transportation•Secure energy supplies•Safe and secure water

supplies•Well educated workforce•Healthy people•Resilient trading

partners

Which of these events is most important? (YouGov, August 2007, 2012 respondents)

Flooding 85% 16%

Drought/water restrictions 57% 32%

Heatwaves 40% 27%

Increased hay fever 28% 21%

Subsidence 26% 8%

Windstorms 23% 14%

What are you prepared to do to manage your risk?(YouGov, August 2007, 2012 respondents)

Measures against: Average UK

Most ‘at risk’ region

Most active region

Flooding (16%) 26% (12%) 23% 32%

Heatwaves (27%) 43% (21%) 53% 53%

Subsidence (8%) 24% 20% 26%

Windstorms (23%) 59% (35%) 67% 67%

Who would you trust to give you advice on

protecting your home from bad weather? (YouGov, August 2007, 2012 respondents)

Government 33% 84%

Environment Agency 61%

Local authorities 39% 64%

Fire and Police Services 57%

Insurers 22% 51%

Mortgage lenders 8%

Water companies 21%

Gas companies 12 %

Customers’ needs – personal lines

• Two thirds of people say preventing climate change is their responsibility• Around 6 out of 10 people say protecting the UK from climate change is their responsibility• Around 4 out of 10 customers say they want climate-friendly products

Engaging with government

• EU Adaptation Green paper and UK Adaptation

Framework• UK Climate Change Bill• UK Government Spending

Review• Thames and Humber

strategies• Housing Green Paper• Code for Sustainable

Homes

Customers’ needs - commercial

• Only one quarter of SMEs think climate change will affect their business…..

…..but two thirds of those which have suffered a flood said their insurers helped them deal with it

• 98 of the FTSE100 identify climate change as a business threat (80% of FTSE500)

New market opportunities

                                                                               

£450m-£1.3bn p.a. in industrial renewables

£33.5bn carbon trading market could give rise to a significant insurance market, including guarantees for CDM delivery

Higher uptake of Household and SME insurance

Communicating climate risks• People identify with local, recent events that

they can imagine happening to them• They deal with the ‘here and now’ and act if

everyone else is acting• They look to sources of authority for advice,

especially in a crisis• Politicians are nervous about getting too far

ahead of their electorates – and business cannot ignore customers’ wishes

• Journey together

An industry initiative

• Lead in risk analysis – and share our research

•Inform public policy making

•Support climate awareness amongst our customers

• Incorporate climate change into our investment strategies

•Reduce the environmental impact of our business

•Report and be accountable

www.abi.org.uk/climatechange

www.abi.org.uk/flooding

www.climatewise.org.uk