Prince Charles and global insurers join forces on climate change

His Royal Highness (HRH) Charles, the Prince of Wales, has launched a new Sustainable Markets Initiative (SMI) Insurance Task Force during a visit to Lloyd’s of London, reports sister publication Insurance Times.

The SMI Insurance Task Force, which was convened by Prince Charles and chaired by Lloyd’s, comprises of executives from some of the world’s largest insurance and reinsurance companies, including Aon’s chief executive Greg Case and Howden Group boss David Howden, to name a few.

The task force aims to provide an influential platform for the insurance industry, so that it can collectively work to advance the world’s progress towards a net zero economy - the partnership believes that the global insurance industry has a critical role to play in achieving this climate ambition because it has a unique view of the climate crisis thanks to decades of providing support to communities, businesses and economies through severe weather events.

The SMI task force has also published a statement of intent, committing to provide climate positive financing and risk management solutions to support and encourage individuals and businesses around the world to accelerate their transition towards a sustainable future.

Lloyd’s chairman Bruce Carnegie-Brown said: “As the world begins to recover from a pandemic that has caused significant and far-reaching financial and societal challenges, it does so with an opportunity to build back with sustainability as a foundation and guiding principle.

“Although climate change poses unprecedented systemic risk, it is one which – through partnership and accelerated action – we have the means to address.

”As a task force, we are making a resolute commitment to be a catalyst for action, to help create a more sustainable future through the risks we manage and the capital we invest.”

Lutine Bell 

During the Prince of Wales’s visit, the Lloyd’s Lutine Bell rung out twice, marking the significant global insurance industry commitment to drive climate positive action at pace through a number of key initiatives.

The Prince of Wales said: “The insurance industry is exceptionally well placed to understand the impact of climate change and the damage it can cause to us all if we don’t take action now.

”This is why I am so pleased that a large number of the world’s leading insurance companies have joined together to identify how the insurance industry can help put nature, people and the planet at the heart of our entire economy.”

 The four key initiatives launched by the task force include: 

1. Driving insurance product and services innovation to empower commercial customers to develop, invest in and scale their sustainability initiatives, supporting green innovation across multiple sectors and geographies. As part of this initiative, the task force will launch at least two new insurance products to protect priority industries - such as nuclear energy, hydrogen and offshore wind - against an evolving risk landscape and to enable accelerated growth.
2. Implementing sustainable processes across the insurance supply chain to encourage and incentivise individuals to take positive actions to live more sustainably. This will include launching an industry-wide framework to drive sustainable outcomes for customers, for example through introducing ’build back better’ claims clauses in home insurance policies, to encourage customers to rebuild damaged properties with more sustainable materials in support of a net zero transition.
3. Establishing a public-private disaster resilience, response and recovery framework to help protect developing nations from the evolving economic and societal impacts of climate change, including the effects of increasingly frequent and severe weather events. The framework will leverage the insurance industry’s unique ability to combine an insurance product with risk management and loss recovery services, to help increase preparedness and limit the impacts of these events. Once developed, this solution will be rolled out across vulnerable countries to support better disaster response and recovery, with a pilot being initiated in 2021.
4. Developing a framework for accelerating and scaling sustainable investment to help unlock the $30 trillion worth of assets under management within the global (re)insurance industry, to direct capital towards investments that drive climate positive outcomes in both developed and developing nations. As part of this initiative, an investment proposal will be developed through public and private sector collaboration, with a particular focus on renewable energy and climate transition assets to facilitate the transition towards a low carbon economy.

For commercial and individual customers, these actions include adapting and expanding coverage for offshore wind projects in response to rapid growth and new technologies in this sector.