From debate to action: engaging government, business and consumers in tackling the causes and consequences of climate change
Jane Milne
Association of British Insurers
Summer 2007
Anticipated insurance losses
Climate change and UK weather damage
02468
1012141618
Subsidence
Storm
Inland floodCoastal flood
£ billion p.a.
Today Average year
2040-2060s Averageyear
Today Extreme year
2040-2060s Extremeyear
Adaptation responses needed
•Habitable housing•Flexible commercial
buildings•Risk based development•Reliable transportation•Secure energy supplies•Safe and secure water
supplies•Well educated workforce•Healthy people•Resilient trading
partners
Which of these events is most important? (YouGov, August 2007, 2012 respondents)
Flooding 85% 16%
Drought/water restrictions 57% 32%
Heatwaves 40% 27%
Increased hay fever 28% 21%
Subsidence 26% 8%
Windstorms 23% 14%
What are you prepared to do to manage your risk?(YouGov, August 2007, 2012 respondents)
Measures against: Average UK
Most ‘at risk’ region
Most active region
Flooding (16%) 26% (12%) 23% 32%
Heatwaves (27%) 43% (21%) 53% 53%
Subsidence (8%) 24% 20% 26%
Windstorms (23%) 59% (35%) 67% 67%
Who would you trust to give you advice on
protecting your home from bad weather? (YouGov, August 2007, 2012 respondents)
Government 33% 84%
Environment Agency 61%
Local authorities 39% 64%
Fire and Police Services 57%
Insurers 22% 51%
Mortgage lenders 8%
Water companies 21%
Gas companies 12 %
Customers’ needs – personal lines
• Two thirds of people say preventing climate change is their responsibility• Around 6 out of 10 people say protecting the UK from climate change is their responsibility• Around 4 out of 10 customers say they want climate-friendly products
Engaging with government
• EU Adaptation Green paper and UK Adaptation
Framework• UK Climate Change Bill• UK Government Spending
Review• Thames and Humber
strategies• Housing Green Paper• Code for Sustainable
Homes
Customers’ needs - commercial
• Only one quarter of SMEs think climate change will affect their business…..
…..but two thirds of those which have suffered a flood said their insurers helped them deal with it
• 98 of the FTSE100 identify climate change as a business threat (80% of FTSE500)
New market opportunities
£450m-£1.3bn p.a. in industrial renewables
£33.5bn carbon trading market could give rise to a significant insurance market, including guarantees for CDM delivery
Higher uptake of Household and SME insurance
Communicating climate risks• People identify with local, recent events that
they can imagine happening to them• They deal with the ‘here and now’ and act if
everyone else is acting• They look to sources of authority for advice,
especially in a crisis• Politicians are nervous about getting too far
ahead of their electorates – and business cannot ignore customers’ wishes
• Journey together
An industry initiative
• Lead in risk analysis – and share our research
•Inform public policy making
•Support climate awareness amongst our customers
• Incorporate climate change into our investment strategies
•Reduce the environmental impact of our business
•Report and be accountable
www.abi.org.uk/climatechange
www.abi.org.uk/flooding
www.climatewise.org.uk