Climate is the ‘biggest single opportunity’ the insurance industry has ever seen, CEO says

Climate is the ‘biggest single opportunity’ the insurance industry has ever seen, CEO say

 

LONDON — Climate is the “ultimate systemic risk” and represents “the biggest single opportunity the insurance industry has ever seen,” according to the CEO of the centuries-old insurance market Lloyd’s.

In an interview with CNBC, John Neal, who heads up the British company, attempted to paint a picture of how his sector would operate going forward.

 

“We think of Covid as systemic risk — climate is the ultimate systemic risk, so this is our chance to show businesses, communities and even governments how we can help,” Neal, who was speaking at the COP26 climate change conference in Glasgow, Scotland, said last week.  

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 Climate-focused litigation is another issues. Last week, a publication from the Insure Our Future campaign said insurers were “waking up to the growing risk that they may have to pay for the legal costs and damages of fossil fuel companies targeted by climate lawsuits.”

 

Data and the long game

Back at Lloyd’s, Neal was asked about pricing climate risk when providing insurance and if the tools were available to do that. His response emphasized the importance of gathering knowledge over a sustained period of time.

“We’ve got 25 years of high quality weather data,” he said. “The frequency and severity of … convective storms, right the way up to hurricane related activity we see in the U.S. – we’ve got amazing data on that,” he went on to add.