The global insurance industry, which currently accounts for a third of the world’s investment capital, yesterday (23 September, 15.30 Eastern Time Zone) took centre stage at the UN Climate Summit in New York. Pledging a rise in its climate-smart investments – from $42 billion to $84 billion by end of 2015 – the insurance industry is set to transform its mainstream asset management by placing a more emphasis on climate risk.
For the first time ever, the International Cooperative and Mutual Insurance Federation (ICMIF) and the International Insurance Society (IIS), spoke as one voice at the UN Secretary-General’s Climate Summit.
Shaun Tarbuck, CEO of the International Cooperative and Mutual Insurance Federation (ICMIF) represents almost one third of the insurance sector and spoke at the afternoon Finance Session at the UN, he said:
“The insurance industry manages a third of the world’s investment capital – approximately US$30 trillion. Yet according to an International Finance Corporation (part of the World Bank Group) report in 2012 only US$42 billion of this can be classified as green or climate-smart investments. As the most climate-risk aware sector in finance, insurers can lead the asset management world, by overlaying good capital disciplines to manage our own climate risk which must be understood and managed across all of our investments, and thereby creating the resilient cities, communities and assets we all desire.”
The Climate Summit was held 14 months before countries meet in Paris to reach a global climate agreement.
Mr. Tarbuck went on to outline the insurance industry’s ambitious plans.
- Create and monitor a Climate Risk Investment Framework that will become accountable under the new UN Hyogo Framework for its adoption across the insurance industry, which will impact significantly climate and disaster risk reduction and resilience.
- Commit to doubling the industry investment in climate-smart investments from the current $42 billion to $84 billion by end of 2015.
- Beyond the UN’s Framework Convention on Climate Change in Paris (November 2015) the industry will further commit to increasing the amount invested in climate-smart investments to ten times the current amount by 2020.
Mr.Tarbuck concluded: “These are bold statements of intent. But as insurers we believe we start with a big advantage, because we are already in the business of protecting lives and livelihoods in both developed and emerging countries.”
About ICMIF
ICMIF aims to promote and work with the cooperative and mutual insurance sector globally by providing valuable, cutting-edge information and services to members and by representing the interests of the global cooperative and mutual insurance sector
With its global headquarters in the United Kingdom and regional offices in Washington DC, USA; Tokyo, Japan; and Brussels, Belgium, today ICMIF represents over 225 “people-centred insurers” in 70+ countries with over USD 250 billion in premium income.
Mr. Tarbuck’s full speech
Your Excellency, thank you for the opportunity to address the Climate Finance Session on behalf of my organisation, the International Cooperative and Mutual Insurance Federation (ICMIF), and the International Insurance Society (IIS). For the first time this Summit has brought us together to speak with a single voice. Together our organizations represent the majority of insurance companies globally.
Insurance and reinsurance really are the ultimate ‘community product’ enabling populations to understand and share life’s big risks at a local level and at a global level via public, private and mutual mechanisms. Through insurance, society has confronted, and overcome many seemingly overwhelming challenges. We can do the same with climate risk.
Later today you will hear from my colleagues, Michel Lies of Swiss Re and Dominic Casserley of Willis Group on the other areas of our plan. I will focus on the insurance industry’s role as institutional investors.
The insurance industry manages a third of the world’s investment capital – approximately US$30 trillion. Yet according to an IFC report in 2012 only US$42 billion of this can be classified as green or climate smart investments. As the most climate-risk aware sector in finance, insurers can lead the asset management world, by overlaying good capital disciplines to manage our own climate risk which must be understood and managed across all of our investments, and thereby creating the resilient cities, communities and assets we all desire.
So, from today at the UN Summit, we begin the process of transforming our mainstream asset management activities.
Between now and Paris we will commit to three things:
- Creating and monitoring a Climate Risk Investment Framework that will become accountable under the new UN Hyogo Framework for its adoption across our industry, which will impact significantly climate and disaster risk reduction and resilience.
- We commit to doubling the industry investment in climate smart investments from the current $42 billion to $84 billion by end of 2015
- Beyond Paris, we will further commit to increasing the amount invested in Climate Smart Investments to ten times the current amount, by 2020, enabled by the new framework that will be adopted in Paris and promoted by both our industry bodies, over the next five years.
These are bold statements of intent. But as insurers we believe we start with a big advantage, because we are already in the business of protecting lives and livelihoods in both developed and emerging countries.
Your Excellency. We give you our institutional and personal commitment to do all possible to work with our stakeholders and your agencies to achieve this vision.
