If you ask the London & International Insurance Brokers’ Association (LIIBA), the trade body will say that London’s insurance brokers have what it takes to help make carbon neutrality not just an aim but a reality.
“Our members will be at the forefront of the drive to achieve ‘net zero’ by 2050,” said LIIBA chief executive and Insurance Business columnist Christopher Croft (pictured) when the broker representative group published its Our Role in Net Zero policy paper. “Today, the climate crisis is the biggest challenge facing our society. Net zero is the government’s response.
“Across their value chain, businesses need to make deep cuts to greenhouse gas emissions and remove residual emissions from the atmosphere. Attaining that goal will require radical change by organisations – and they’ll need help. Insurance and brokers in particular have a key role to play because of their unique position in the economy.”
In fact, according to LIIBA, there are five ways London’s specialist and commercial insurance market can make net zero happen – modelling climate risk, enabling transition and new technology, managing liabilities and legal threats, measuring risk and progress, and applying skills and behavioural change.
In enabling transition, for instance, brokers can facilitate faster and greater investment and deployment by helping de-risk the adoption of net zero solutions.
Croft highlighted: “Brokers understand balance sheet risk; they’re involved in huge infrastructure projects, international transportation networks; and they’ve developed a detailed world-leading understanding of climate risk. Their role in this change will be critical.
“That’s why we’re publishing this paper to start the conversation with the London market and our colleagues around the London Market Group’s table. London and international brokers are committed to making this a reality. It’s also important to recognise that there will be significant commercial opportunities for the market arising from the drive for net zero.”
Our Role in Net Zero, which is available for download on the LIIBA website, is also being sent to the government, regulators, and other stakeholders as part of engaging in discussion to further map out how the insurance industry can contribute to carbon neutrality efforts.
“We are delighted to support the LIIBA paper which calls for a net zero economy by 2050,” commented Willis Towers Watson’s Nick Dunlop. “At Willis Towers Watson we have a deep understanding of climate risk and the risks associated for clients who wish to transition to a low-carbon economy.
“The LIIBA paper is fully aligned with the launch of the Climate Transition Pathway, which provides an accreditation framework supporting clients’ transition to a net zero economy and aims to achieve a more sustainable future.”
For ClimateWise senior programme manager Bronwyn Claire, this is an important step in (re)insurers’ ability to align a significant book of underwriting liabilities with net zero.
Claire said: “The unique architecture of the insurance industry means the wider engagement of brokers, modellers, loss adjustors, claims managers, repairers, and others connected to the underwritten policy, insured event, and restitution process is needed for an effective net zero ambition.
“As a leadership platform with a focus on net zero, ClimateWise looks forward to sharing our experience as long-term pioneers in this field and welcome discussions on how we can support and multiply the action of LIIBA members.”
Meanwhile Aon global chair of reinsurance solutions and ClimateWise chair Dominic Christian had this to say: “The acknowledgement of the role of the insurance industry in restraining climate change and environmental damage is a welcome move by the London & International Insurance Brokers’ Association.
“As we head towards this year’s UN COP-26 held in the UK, it is vital the insurance industry raises its head above the parapet with significant ambition and rapidly moves warm words to meaningful action on climate change.”
“ClimateWise continues to support engagement of the whole value chain to encourage joined up action that is nature- and climate-positive,” added Christian. “Brokers are the connective tissue in this process, able to ensure informed decisions are at the heart of some of the projects that will shape our future economies and our ability to build back better.”