Insurers must price risks to wake up world to scale of climate change, warns Berners-Lee
Marsh McLennan looks at role insurers and new talent will play to help clients face new era of risk
Insurers have been urged by leading climate scientist Professor Mike Berners-Lee, author of There is No Planet B, to factor the environmental crisis into pricing at the earliest opportunity to bring about behavioural change.
“Insurance is actually a really critical part of the wake-up system for humanity. Because when people’s insurance premiums rise… it is impossible to ignore the stuff that is going on,” he told the audience gathered for Marsh McLennan’s Rising Professionals’ Global Forum in London this week.
He added that the world is facing a multi-dimensional polycrisis, urging insurers and brokers to play their part in raising the alarm. “The best thing you [the insurance sector] can do is make sure we properly factor in the risks we’re facing with this polycrisis. When you put that into the way you’re doing your insurance, that will be one way of helping the world to wake up,” Berners-Lee said.
Addressing the next generation of insurance professionals invited to the event, he made a direct appeal to younger insurance market players to call out when the impact of climate change is underplayed. “Any time any of you are in a meeting with colleagues in your industry, and there’s a conversation going on as if we’re not in this flat-out really, really serious situation, then you have permission and the responsibility to bring the situation back into the room and make sure everybody’s fully aware of it,” he said.
Berners-Lee said young professionals entering the sector are in an industry at the centre of one of the world’s biggest challenges. “You’ve got a fantastic role to play. It’s not often that the business interests of an industry align so closely with what the world needs.”
The event gathered 800 young and rising professionals from across the insurance industry for a two-day programme.
Marsh McLennan called on the industry to expand, develop and diversify its talent base as it rises to the challenges faced by clients in an increasingly volatile risk environment. John Doyle, the broker’s president and CEO, said: “From the geopolitical and economic situation to climate, technology and social risks, our clients increasingly want to be more agile and resilient to future shocks. Insurance and reinsurance are important means to propelling our economy and society forward. As an industry, we have a clear responsibility to develop our future leaders to meet these challenges, which is what the Rising Professionals’ Global Forum is all about.”
Vicky Carter, chair of global capital solutions, international at Guy Carpenter and the Rising Professionals’ initiative, added: “Our industry has a pivotal role to play to enhance resilience in this new era of risk. To meet the challenge, our industry will require a workforce with the right talent and skill sets for these unique demands. We must inspire the next generation to challenge the status quo and adopt pioneering approaches to risk transfer so the (re)insurance industry continues to transform uncertainty into opportunity.”
Lloyd’s chairman Bruce Carnegie-Brown told the audience that the insurance sector must be more ambitious in its response to emerging and changing risk.
“There is no shortage of challenges for us to tackle, and therefore no shortage of opportunity to play a leading role in helping governments, businesses and individuals – your clients – manage the risks they face,” he said.
He added that London has the talent and capital to provide solutions for the greatest challenges of climate change, cyber and geopolitical risk. A quarter of Lloyd’s capital is deployed for underwriting nat cat risk, Carnegie-Brown said, while Lloyd’s takes a 25% share of the global cyber insurance market.
“We’re right in the middle of these global challenges. And because we live in an increasingly connected world, the correlation and aggregation of these risks could be truly vast,” he said.
