Insurance and Climate Research
Most of us may be surprised by the fact that insurance providers are supporting climate change research. If you are wondering as well, you must ask RSA Insurance Group, a UK based insurer operating world-wide. RSA's business in Canada is mostly dedicated to marine insurance, but the message the company is demonstrating is important across the whole insurance field.
RSA recently started a formal alliance with the World Wildlife Fund (WWF). The synergy is an inspiring case of a win-win situation; it qualifies as both "the right thing" and also a business goal.
If you seek someone who can monetize a climate change, it must be insurance analysts. However, insurers cannot always anticipate what lies ahead precisely enough. In the wake of the floods and droughts around the world, insurers bumped into huge claims (mostly from their agricultural clients) and thus had to pay unexpected compensations on those insurance products that are linked with changing weather, climate, and temperature. This was a sign that they were incapable of assessing their products' riskiness accurately. And since risk is the basic concept underlying the whole industry, the level of knowledge had to be improved.
Therefore, this painful experience and the fact that RSA is so deeply involved with marine insurance were the decisive factors that pressed RSA to look for information, opinions, and support at WWF. Not that insurers are in danger of extinction; they rather are interested in the transformations happening in the world's environment - those that WWF studies so attentively. WWF administers many analyses to care for animals whose life depends on the smallest variations in the climate. By supporting WWF in doing what it is best at, the RSA group is going to gain from more reliable forecasts. This will then provide the means for the insurer to ascertain better the risk it is facing, charge for its policies more appropriately, and dodge unnecessary claims.
Given that the improved estimates should be available publicly, the competition between insurers will be affected minimally. At most, smoother competition will push down the prices for insurees (as long as the forecasts don't turn out to be extremely disastrous). The bright side is that wild animals will welcome the RSA - WWF partnership anyhow.
More companies are finding out that greener business can not only turn out to be much cheaper, but also attract the attention of their customers and the public in one fell swoop. The spirit of this new corporate mindset can be detected at enterprises like Sony, which only uses recycled paper for all administrative work, PricewaterhouseCoopers, who are also contemplating a global move in the direction of smaller-footprint operations, and Adobe Systems Incorporated, who have been recognized a few times for building and inhabiting very small-footprint offices with modern eco-friendly technologies.
RSA recently started a formal alliance with the World Wildlife Fund (WWF). The synergy is an inspiring case of a win-win situation; it qualifies as both "the right thing" and also a business goal.
If you seek someone who can monetize a climate change, it must be insurance analysts. However, insurers cannot always anticipate what lies ahead precisely enough. In the wake of the floods and droughts around the world, insurers bumped into huge claims (mostly from their agricultural clients) and thus had to pay unexpected compensations on those insurance products that are linked with changing weather, climate, and temperature. This was a sign that they were incapable of assessing their products' riskiness accurately. And since risk is the basic concept underlying the whole industry, the level of knowledge had to be improved.
Therefore, this painful experience and the fact that RSA is so deeply involved with marine insurance were the decisive factors that pressed RSA to look for information, opinions, and support at WWF. Not that insurers are in danger of extinction; they rather are interested in the transformations happening in the world's environment - those that WWF studies so attentively. WWF administers many analyses to care for animals whose life depends on the smallest variations in the climate. By supporting WWF in doing what it is best at, the RSA group is going to gain from more reliable forecasts. This will then provide the means for the insurer to ascertain better the risk it is facing, charge for its policies more appropriately, and dodge unnecessary claims.
Given that the improved estimates should be available publicly, the competition between insurers will be affected minimally. At most, smoother competition will push down the prices for insurees (as long as the forecasts don't turn out to be extremely disastrous). The bright side is that wild animals will welcome the RSA - WWF partnership anyhow.
More companies are finding out that greener business can not only turn out to be much cheaper, but also attract the attention of their customers and the public in one fell swoop. The spirit of this new corporate mindset can be detected at enterprises like Sony, which only uses recycled paper for all administrative work, PricewaterhouseCoopers, who are also contemplating a global move in the direction of smaller-footprint operations, and Adobe Systems Incorporated, who have been recognized a few times for building and inhabiting very small-footprint offices with modern eco-friendly technologies.