Actionable steps for insurers, organizations, and policymakers to advance the role of insurance in climate change
At COP26, the Insurance Development Forum’s Secretary General, Ekhosuehi Iyahen, announced three major initiatives and a new partnership, all with the objective of enhancing the ability of insurers, reinsurers, and policymakers to implement more and better interventions around climate change. Secretary General Iyahen, along with Milliman’s Chair Ken Mungan, Michael McCord of the MicroInsurance Centre at Milliman, and additional special guests, dig down into the details of these initiatives to understand exactly what they mean for the insurance industry, governments, and policymakers and how they can offer opportunities for all of us, while we improve the infrastructure for climate change resilience.
Related webinar material
- Download slides on the Global Risk Modeling Alliance
- Download slides on the Global Resilience Index Initiative
- Download slides on the START Ready programme
Below is a summary of 10 ideas to come out of the Milliman Climate Resilience webinar, “Implementing the Insurance Development Forum's (IDF) three COP26 initiatives,” based on the discussion with key speakers Ekhosuehi Iyahen (IDF), Ken Mungan (Milliman), and Michael J. McCord (MicroInsurance Centre at Milliman), and special guests Dr. Nicola Ranger (Oxford Sustainable Finance Group), Nick Moody (IDF’s Risk Modelling Steering Group), and Clare Harris (Start Network). According to the IDF, the three initiatives discussed during the webinar, “connect the insurance sector’s world-leading risk assessment capability to the challenges of building resilience to climate change.”
The IDF’s first commitment, the Global Resilience Index Initiative (GRII), is a “multi-agency effort to create the first public good, globally consistent, multi-hazard catastrophe risk model” with the goal of driving resilience and resilient investment.
The second initiative, the Global Risk Modelling Alliance (GRMA), is a public good program that supports countries developing their risk analytics functions through “affordable access, increased choice, and transparency of data inputs.”
Finally, the IDF’s support of the Start Ready program aims to provide expertise on “anticipatory finance” mechanisms to Start Network members so more people can be protected when a climate-related crisis occurs.
During the webinar, the speakers presented 10+ ideas for insurers, governments, and policymakers who want to begin to take action around climate change, especially under these three initiatives. Below is a brief look at those actions, as discussed in the webinar.
- For risk managers: Ask yourself, “how are you bringing climate-related risks into decision making, particularly in critical, vulnerable sectors?”
- For financiers: Ask yourself, “how are financing decisions affecting the resilience of communities and countries, and what opportunities are there to support resilience of communities and economies?”
- For everyone: Promote policymakers to issue clear resilience plans to guide investments and support data as a public good.
- For everyone: Ask yourself, “how else can my organization help in promoting resilience and enhancing risk knowledge?”
- For executives: Proactive companies have made their approach in this area as a strategic move, going beyond CSR and siloed ESG activities. The more the world is using insurance-type thinking based on insurance risk modelling methodologies, the more confidence will increase, the more climate and disaster risk finance will be unlocked, and new markets will emerge and grow. Become an advocate in your organization.
- For private sector managers: Private sector companies have chosen to sign memorandum of understanding (MoUs) with the IDF to give financial support, or have opted to provide in-kind technical support, depending on the organization. Both modes of contribution are welcome and support the development of open risk modelling infrastructure as well as building local analytics capability at the country-level.
- For actuaries, modelers, researchers, meteorological officers from government agencies, and others: Get involved with the Risk Modelling working group of the IDF, which is a forum of over 70 organizations drawn from the private sector, research institutions, and public and humanitarian sectors. It is this group that drives the thinking behind the GRMA.
- For everyone: Be interested and show a desire to understand. Listen first to help formulate your ideas.
- For everyone: Identify the impact you are looking for (from listening) before developing a solution (with the potential target groups).
- For everyone: Contact Ekhosuehi Iyahen at the IDF to lend support where you can in providing solutions of value, especially to low-income people.
GRII actionable ideas:
GRMA actionable ideas:
Start Ready program actionable ideas:
General actionable idea related to all three initiatives:
It will take a collaborative and multi-stakeholder approach–involving insurers, policymakers, and the private sector–to make these initiatives a reality. It begins with some concrete, actionable steps noted above. For more on the IDF’s goals and how to implement them, stream the webinar on-demand.