What can the Australia insurance industry do to solve international problems? The United Nations’ Butch Bacani has met with the Insurance Council of Australia’s Rob Whelan to discuss the future of sustainable insurance.
Bacani, the head of the United Nations Environment Programme’s (UNEP) landmark sustainable insurance initiative has affirmed that though the industry faces global challenges, the solutions remain “utterly local”.
Butch Bacani, head of the UNEP’s Principles of Sustainable Insurance (PSI) initiative, said: “Promoting mitigation and raising awareness of the dangers of extreme weather is core to the purpose of insurance.
“If you’re able to help communities cope and manage risk in a more resilient way then you’re also making communities and economies more resilient, and making insurance more accessible and affordable.
“While many issues can be global, implementation will be utterly local ... so there is a key role for market associations, like the ICA, to play. This is one of the key reasons we’re here ... these principles apply to all lines of insurance and across geographies.”
During a conversation with Bacani at the ICA last week, Rob Whelan highlighted the ICA’s work in developing a building resilience rating tool and explained the ICA’s own ’holistic’ financial literacy project, which aims to help consumers understand insurance and will be launched in 2013.
“The resilience tool offers a way to physically measure how a given building or area is able to withstand known perils, so policyholders are able to quantify the extent to which it is resilient to flood, hail or storm,” he said.
“This is a practical tool which has the support of local councils and building suppliers so people can help themselves to build more resilient communities.”
Bacani added these initiatives were prime examples of how the regional expertise of Australian insurers could help to have a wider impact on global premiums. He said providing policyholders with the means to assess their own risk and educating them about the importance of insurance was essential.