Media Coverage
Insurers pressed to cut emissions
14/09/2007 FIONA HARVEY | Financial Times
Insurance companies must cut their own greenhouse gas emissions and help their customers do the same or else face soaring claims bills, the Association of British Insurers warned yesterday. The ABI said companies must measure and reduce their environmental impact, and suggested they offer incentives such as lower premiums on insuring more efficient cars and ask for improvements in the energy efficiency of the buildings in their property portfolios. Insurers should also share data on the weather and climate change to build up a more accurate picture.
Stephen Haddrill of the ABI said: "Costs have risen as a result of a higher level of claims, ramping up year after year." He suggested insurance executives could set a good example in emissions reduction by cutting their travel.
Insurers are among the industries hardest hit by climate change, which is likely to cause more intense storms, floods, heatwaves and droughts. Weather-related claims have cost an average of Pounds 825m a year in the UK since 1990, and have exceeded Pounds 1bn in four of the past 15 years. This year's floods are thought to have cost at least Pounds 3bn.
The ABI urged insurance companies to "consider the implications of climate change for company performance and shareholder value, and incorporate this information into investment decision-making".
Most of the UK insurance industry, including the biggest names, has signed up to a series of principles, supported by the Prince of Wales, for managing and reducing the risk from climate change.
Insurers will take the lead on analysing the risk, and will pledge to take environmental issues into account in their investment strategies. Life assurers have about Pounds 1,200bn of assets under management.
Tesco also ramped up its environmental efforts yesterday with Pounds 25m over the next five years for the University of Manchester to set up a "sustainable consumption institute". It will research issues such as how people can change their lifestyles to become "low carbon".
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