No major report detailing the key risks facing our societies, communities and businesses is complete without touching on the many impacts of climate change. Yet while climate change affects everyone, it’s often women and girls who face “unique and disproportionate challenges”.
This is the message from Amir Sethu (pictured), head of sustainability at the specialist re/insurance firm MS Amlin who highlighted that this is due to how catastrophes caused by extreme weather exacerbate existing inequalities in society, including gender discrimination, leaving women potentially more exposed to impacts on their livelihoods, health, and security.
“While this is an issue globally, it is more pronounced in developing nations, where women are more likely to shoulder the burden of fetching water, food and fuel,” Sethu said. “The impacts of climate change, such as flooding and drought, disrupt these resources, increasing women’s workloads, and limiting their ability to access education or generate income.
“Dwindling crop yields from erratic weather patterns directly threaten women’s ability to provide food and sustain their families. Meanwhile, health risks posed by climate change also disproportionately affect women, as rising temperatures and the spread of diseases hit pregnant women hardest, putting both mothers and infants at risk.”
Sethu noted that women and children are more likely to be forced out of their homes by climate-related disasters, further increasing their vulnerability to exploitation and gender-based violence. Globally, he said, women are also more likely to experience poverty, which makes it harder for them to recover from financial shocks which affect jobs, housing and infrastructure.
“The impacts of climate change are a threat multiplier whereby they exacerbate existing issues in society, including gender discrimination, access to education and gender-based violence,” he said. “Despite being more likely to experience the negative effects of climate change, women are often sidelined in climate-related decision-making processes.
“It’s crucial that we recognise the real-world impacts of climate change on women and ensure they have full and equal participation in decision-making, whether that’s developing climate policies, insurance solutions or local adaptation measures.”
Examining the role re/insurers have to play, Sethu emphasised that the climate crisis isn’t gender neutral and that its disproportionate impacts are interlinked with existing inequalities and the specific roles, responsibilities, and vulnerabilities that women have in many societies.
If the industry is to properly serve customers and communities, he said, it needs to recognise that women are confronted by unique challenges from a changing climate. Only then can the sector begin to develop inclusive policies and processes that improve women's access to insurance, and help enhance their overall resilience.
Outlining some of the key ways insurers can help communities build resilience, he noted that many parts of the world face a protection gap between insured and non-insured losses. It is by promoting awareness of, and preparedness against climate risk, he said, that the re/insurance industry can help individuals and businesses to understand and address their vulnerabilities.
“Natural catastrophe insurance coverage primarily focuses on physical damage, whereas the secondary impacts of disasters range from destabilised societies and job losses to reduced productivity and impacts on mental and physical health,” he said. “The insurance industry needs to consider how it can adapt and deploy its products – sometimes in novel ways – to address these secondary threats.
“For example, microinsurance can offer financial protection to women farmers against crop failure due to extreme weather, enabling them to recover quicker from droughts or flooding. Insurers can help communities to build resilience by stepping up their focus on mitigation and adaptation.”
Rather than merely responding to losses, he said, it is better to take proactive steps to reduce the toll on human life and livelihoods. By expanding their risk engineering services, for example, insurers can help communities assess their vulnerabilities, identify climate hazards, and implement risk-reduction measures.
“As losses from climate change increase, the industry also needs to explore innovative ways to manage extreme risks that no insurer could underwrite alone,” he said. “I’d like to see the industry collaborate more closely with governments, banks and investors to help unlock financing for adaptation and mitigation measures.
“Specialist insurers in the Lloyd’s market have demonstrated how this can be done through so-called debt-for-nature swaps. These innovative financing models work by cancelling, reducing or restructuring a developing nation’s sovereign debt, in exchange for commitments to invest in climate adaptation or nature preservation.”
In 2023, he said, the Lloyd’s market, including MS Amlin, supported a US$1.6 billion debt-for-nature swap, which freed up funding for Ecuador to invest in marine conservation in the Galapagos Islands - a UNESCO World Heritage site. This is an example of how, by investing in healthy natural environments, the sector can help protect against the impacts of climate change and decrease communities' exposure to risks.
MS Amlin’s three-year partnership with the British Red Cross, aimed at reducing the climate vulnerability of women and girls in Bangladesh is another example of how insurers can respond to this crisis. The programme is focused on creating lasting change, he said, through longer-term resilience building in communities acutely affected by the impacts of climate change.
“In addition,” he said, “we will also be encouraging the Red Cross to focus on effecting long-term, systemic change by engaging different generations and adolescent boys and men, as well as women and girls.”
As the climate crisis escalates, Sethu said, there will be increasing opportunities for insurers to use their risk management expertise to help disaster relief charities identify and respond to the dangers communities face.
“Collaboration can only drive better outcomes for all stakeholders and the key is to find a common language between insurers and disaster relief charities,” he said. “[…] Encouraging the sharing of insights, best practices, and lessons learned from past disasters can help both insurers and charities improve their approaches to risk management, and ensure a more effective response when a disaster strikes.”
