Climate turning decidedly nasty as anger increases

Unsurprisingly climate change and its effects are seen as the biggest risk facing the global insurance industry at present.

As the reinsurance market packs its bags and heads to Monaco for its annual rendezvous they are set to be joined by some new, and for some uncomfortable,  guests and the past week as seen the debate over climate and the world’s response start to get edgy if not palpably nasty.

United Nations secretary general António Guterres (pic) lit the touch paper on Wednesday when he rounded on world leaders for their inaction over the impacts of climate change and the efforts to put in place systems to limit global warming.

Seemingly the time for diplomatic language has passed.

“The dog days of summer are not just barking, they are biting,” he said. “Our planet has just endured a season of simmering — the hottest summer on record.  Climate breakdown has begun.

“Scientists have long warned what our fossil fuel addiction will unleash.  Our climate is imploding faster than we can cope with extreme weather events hitting every corner of the planet.

“Surging temperatures demand a surge in action.  Leaders must turn up the heat now for climate solutions.  We can still avoid the worst of climate chaos — and we don’t have a moment to lose.”

A tough stance but it was accompanied by news that the world’s developing nations will push for a UN backed climate fund of $100 billion to be used to compensate them for the worst effects of climate change caused by the developed nations and their use of fossil fuels and greenhouse gases.

The COP28 event in Dubai at the end of the year will see the fund proposal put to global leaders with the aim that the fund will have at least the $100 billion figure in its account by the end of the decade.

Closer to home for the insurance industry will be the arrival of climate protestors in Monaco next week determined to challenge those underwriters they believe have yet to take the requisite action to limit their exposure to current and future fossil fuel projects.

Firmly in their sights is the Lloyd’s market and while they have hailed the approach of some (re)insurers to the upcoming auctions for oil rights in the Democratic Republic of Congo they are determined to name and shame those they believe still have too much oil, coal and gas on their hands.

It seems the gloves are off and the insurance industry will be facing pressure from both sides. From the campaigners who want to see them walk away from fossil fuels, from politicians who will look for public-private partnerships to mitigate the impact of climate driven events, and from governments who are likely to blanch at the size of the proposed climate compensation fund and will look to drive more stringent regulations in an effort to reduce their share of the fund’s contributions.

Jon Guy, Editor,

Emerging Risks