The insurance industry needs to do more to tackle climate change and rapid biodiversity loss, and it needs to do it faster.
That is the urgent message that Jason Storah (pictured), chief executive of Aviva Canada, pulled away from his time at the United Nations biodiversity conference in Montreal, known as COP15.
“We need to think about whether we are doing enough and how can we do it quicker,” Storah said. “There’s no one sector of business, one part of government, or one set of individuals that can make enough difference on their own. This really does require a collective effort.”
After two weeks of tense negotiations, nearly 200 countries agreed to a new set of goals to stop and reverse global biodiversity loss by the end of the decade. The landmark deal underscored the ambitious “30x30” target – to conserve 30% of the world’s land and 30% of oceans by 2030.
Speaking to Insurance Business, the CEO said he was galvanized by the discussions and meetings he had with people at the summit. The largest biodiversity conference in a decade, COP15 was held from December 7-19, 2022. Aviva was part of the delegation for the Finance for Biodiversity Foundation Pledge.
“It’s great to see so many people with a real desire to make a difference in this space,” he added. “I think we’ve definitely seen momentum given the agreement that’s come out, which includes what Aviva and other businesses and stakeholders were asking for around mandatory disclosure and assessment.”
Today, our CEO, @jasonstorah, joined @UNDP‘s Business and Biodiversity CEO Roundtable to discuss the key barriers in moving towards a nature positive business, as well as our biggest opportunities to help tackle climate change and biodiversity loss. #COP15 #COP15BusinessForum pic.twitter.com/PJjkndbIGg— Aviva Canada (@AvivaCanada) December 13, 2022
Ahead of the conference, Aviva released its inaugural biodiversity annual report, outlining its commitments and achievements in championing biodiversity projects and partnerships. For Storah, addressing climate change and biodiversity loss go hand in hand.
“We need nature and biodiversity for economies to be resilient, for communities to be healthy, and for businesses to thrive,” he said. “It just felt like a logical part of our overall sustainability strategy to focus on this because there’s such a direct correlation between making a difference around biodiversity in nature and seeing the impact on our customers around weather and catastrophic losses and claims they have.”
The price tag for the impacts of climate change is growing larger by the year. Severe weather events caused more than $2.1 billion in insured damage in Canada in 2021, according to the Insurance Bureau of Canada (IBC). 2022’s figure could well be much higher; Hurricane Fiona alone is estimated to have dealt $660 million in insured damage when it struck in late September.
“If you think about ecosystem collapse and the problematic consequences of climate change, all those things have a negative impact for individuals, businesses, and governments, let alone their insurance premiums and the insurance business model,” Storah told Insurance Business.
The increasing frequency of storms and other natural catastrophes has also significantly widened the protection gap for Canadians. Up to 10% of homes across the country are uninsurable for flooding, according to IBC, making millions of people vulnerable. Data from insurance comparison website RATESDOTCA also showed the average cost of home insurance has jumped more than three times the rate of inflation over the past decade.
“To try and course correct after the fact is very difficult. Moving businesses and individuals away from uninsurable areas – that’s not realistic. So, taking actions that can mitigate future losses feels like a logical thing to do,” Storah said.
In 2023, Aviva plans to build on its deforestation risk assessment and complete its biodiversity risk assessment to better understand impacts and dependencies on terrestrial, marine and freshwater environments. These risk assessments will help the insurance group explore more actions to help reverse biodiversity loss, it said in its inaugural report.
"As an insurer, if we don’t protect nature we will experience significant risks to the economy from ecosystem collapse and climate change, it will impact the insurance business model". #COP15— Aviva Canada (@AvivaCanada) December 12, 2022
Storah hopes the industry takes its cue from Aviva and engages in healthy competition towards its common goal for the environment.
“I would really like the rest of the industry to set the standard for Aviva, to challenge us to raise the bar, to make tangible actions that are comparable with or better than the actions that we’ve taken,” the CEO said. “I love healthy competition. I think most people do, too, particularly in the business world. I think we should have healthy competition in terms of making a positive impact on biodiversity and nature in the communities where we do business.”
What are your thoughts on COP15’s biodiversity goals? Let us know your thoughts on this story in the comments below.