North American insurers fall behind on climate change
- North American insurers fall behind on climate change
15 July 2005 - Insurance companies based in North America are failing
to assess non-traditional sources of risk, particularly those posed
by climate change, as effectively as their European counterparts,
according to a report* from Innovest Strategic Value Advisors.
"Although there is continued debate regarding the increasing
frequency of extreme events, climate change may already be
pressuring both reinsurers and insurers," says Brigid Barnett, a
senior analyst at the New York-based socially responsible investment
research firm. "Incorporating the risks of climate change into
products and investment strategies is likely to be an increasingly
important element of business success."
Following analysis of 31 North American insurance firms, the report
concludes that the companies showing the clearest commitment to
sustainability issues are two Canadian life and health insurance
companies, Sun Life and Manulife, and US property and casualty
However, "North American insurers as a group lag far behind their
European counterparts, particularly with respect to the growing risks
from climate change," says Innovest.
They also "have significantly less disclosure on policies and
programmes addressing social and environmental issues relevant to
their business" and most lack a "broad corporate social
Adding a note of optimism, the report says that the strengthening
commitment to social and environmental issues shown by market leaders
such as AIG could lead to improvements throughout the sector.
* North American Insurance Sector Report: A comparative analysis of
company performance on intangible investment risk factors and value