Insurance and reinsurance operators in African countries are partnering with the United Nations to develop a new generation of risk assessment tools that enable the risk transfer industry to better understand the impacts of climate change on their business as well drive economic, social and environmental sustainability under the sustainable development initiative.
The annual PSI African market event was attended by leading insurance practitioners on the continent, the UN and key stakeholders to share experiences and ideas to support the growth, profitability, responsibility, resilience and sustainability of the African insurance industry, and to drive sustainable development on the continent.
The announcement on the partnership also explains that while insurers and re-insurers are also major investors, this initiative will focus on the assessment of climate risks in their core insurance portfolios and products.
Michael Bloomberg, Chair of the Task Force and UN Special Envoy for Climate Action, said: “The more insurers understand climate risks facing the economy, the more they can make prudent decisions in managing risk and serving their clients, and the more efficient and stable our markets will become.
The global insurance premiums and $5 trillion in assets under management, and the pilot group will be tasked with developing analytical tools that they will use to pioneer insurance industry risk disclosures that fall in line with the guidelines and recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD).
The insurance industry has an important role to play in making communities and economies inclusive, resilient and sustainable.
“The recent devastation wrought by Cyclone Idai, and now Cyclone Kenneth, is yet another wake-up call for the urgent need for action and collaboration to better manage risk and support sustainable development.”
Butch Bacani, who leads the PSI Initiative at UN Environment, said, “The world is facing an increasing number of sustainability challenges from climate change, environmental degradation, and pollution to social inequality, financial exclusion and major health risks.
This is why world leaders have committed to delivering prosperity for all on a healthy planet through global goals such as the UN Sustainable Development Goals and the Paris Agreement on Climate Change.
“The insurance industry has long understood the risk of climate change on our communities and customers, and it is vital that the financial sector works collectively to share our knowledge and create a framework for transparent and sustainable operations and reporting. We look forward to working with our global industry peers in the UNEP FI PSI pilot, and contributing to the development of a set of standards to give investors and customers the ability to make informed decisions in the context