How can the insurance industry make cities more sustainable?

The chief executive of AXA famously remarked last year that a 4 degree world is “uninsurable”.

And cities have a major role to play in stopping the rise in global temperatues by transitioning to a low-carbon economy. 60 percent of the global population are estimated to live in urban areas by 2030.

Cities are also bearing the brunt and attending costs of climate change; 2017 alone witnessed extreme weather events from Bangladesh to the Caribbean, with damages running into the hundreds of billions.

With that in mind, the UN has turned its attention to how the insurance industry can protect cities and actively support sustainable development.

The new Insurance Industry Development Goals for Cities, launched today in Montreal, are the result of extensive consultation between UN Environment, ICLEI and major insurers.

The 10 goals are designed to help the industry respond to the growing threat of extreme weather events, air pollution, and the need to promote clean energy, healthy living and climate resilience. Developing long-term strategies to cope with the impact of climate change is at the heart of the goals, while utilising the right tools, such as big data and risk analytics.

Dr Joachim Wenning, CEO of the Munich Re Group, said the new goals “provide a global framework to guide collaboration between insurers and local governments, and to accelerate action.”

With a number of notable exceptions, major insurers have so far failed to respond to the threats and opportunities posed by climate change. But those companies which do prepare early are likely to save money, create jobs and prevent loss of life.

“The insurance industry’s core business is to manage risk, so it’s well-positioned to support urban resilience and sustainability. We encourage our peers in the insurance industry to work together with local governments in promoting the adoption of the Insurance Industry Development Goals for Cities,” added Eric Andersen, Co-President of Aon.