Investment in The Coconut Industry by Nancy Cheruiyot
Implications of climate change for insurance ciwem07
1. Planning for climate
change: sustainable
insurance
Jane Milne
Climate Change Leader
Association of British Insurers
2. Adaptation responses needed
•Habitable housing
•Flexible commercial
buildings
•Risk based development
•Reliable transportation
•Secure energy supplies
•Safe and secure water
supplies
•Well educated workforce
•Healthy people
•Resilient trading
partners
3. Which of these events is most important?
(YouGov, August 2007, 2012 respondents)
Flooding 85% 16%
Drought/water restrictions 57% 32%
Heatwaves 40% 27%
Increased hay fever 28% 21%
Subsidence 26% 8%
Windstorms 23% 14%
4. Which of these events is most important?
(YouGov, August 2007, 2012 respondents)
Flooding 85% 16%
Drought/water restrictions 57% 32%
Heatwaves 40% 27%
Increased hay fever 28% 21%
Subsidence 26% 8%
Windstorms 23% 14%
5. Likely insurance costs
Climate change and UK weather damage
18
16
Today Average year
£ billion p.a.
14
12
10
8 2040-2060s Average
6 year
4
2 Today Extreme year
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2040-2060s Extreme
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9. Hierarchy of choices for
adaptation
Can site/properties be located outside the floodplain?
If not…
Can properties be located in the lowest flood risk areas?
If not…
Can occupied areas be raised above flood heights?
If not…
Are flood defences feasible/ cost effective?
If not…
Identify relevant property resilience options and examine
alternative flood alleviation measures.
10. Managing risk
• Actions to prevent further
climate change
• Actions to protect us from
inevitable climate change
– community and
regional planning
– development planning
– building design
– product design
– institutional behaviours
– individual behaviours
11. Customers’ needs –
personal lines
• Two thirds of people
say preventing climate
change is their
responsibility
• Around 6 out of 10
people say protecting the
UK from climate change
is their responsibility
• Around 4 out of 10
customers say they want
climate-friendly products
12. An industry initiative
• Lead in risk analysis – • Incorporate climate
and share our research change into our
investment strategies
•Inform public policy
•Reduce the
making
environmental impact
of our business
•Support climate
awareness amongst our •Report and be
customers accountable
ABI and leading insurers have been involved in climate change debate for over a decade – and the reinsurers around twice that We reached a significant tipping point last year, through the leadership that the Prime Minister brought, putting climate change at the heart of the international political process This leadership, together with the commissioning of important studies like the Stern Review, has led to much wider acceptance of the reality of climate change, the impacts it will bring and the need for urgent action The work of UKCIP and its stakeholders, many of whom are present today, has laid the foundations for managing climate risks and the effects they will have on our daily lives This study is ABI’s latest contribution to that important work
The number of homes and businesses affected would rise to over 404,000 if a similar event occurred after 0.4m sea level rise This could mean ¾ million people or more homeless – and possibly jobless, with over 50,000 commercial properties affected. The increase varies by location, doubling in Essex and increasing by 77% in Norfolk Vital services would be even more adversely affected with around one in five fire stations, police and ambulance stations affected, around one quarter of community centres, 18% of hospitals and 15% of schools. Over two thirds of electricity sub-stations and 19% of sewage works would be inundated, unless coastal defences are improved.
Hurricanes Katrina and Rita and their aftermath are still fresh in our minds. But we have our own version of this threat here in the UK. The events of 1953 still resonate with many living and working in Eastern England at the time. My own father-in-law recalls working to put coastal defences in place as an Air Ministry quantity surveyor, redeployed to assist in the crisis. Many others have memories of personal loss. Some communities are said to have had their futures permanently changed by events on 31 January and 1 February 1953. We have used insurance catastrophe models to simulate a repeat of the 1953 storm, which had a probability of around 1:200 or 250, at the four different sea levels described. And we have looked at 2 other similar storms that cross the coast at slightly different points – the Humber estuary and the Thames estuary.
Now as a former Treasury official I can well imagine the discussions around the timing of this investment. Sir Nick Stern pointed out in his report on the economics of climate change last week “Adaptation is the only response to impacts that will occur over the next several decades before mitigation measures can have an effect………..Governments can contribute through long term policies for climate-sensitive public goods, including………coastal protection and emergency preparedness.” Within days an onshore gale brought the highest tide at Lowestoft for the last couple of decades, causing some flooding of properties, disruption of road traffic and damage to the railway embankment causing closure of services to Norwich. As this report shows, we must think about tomorrow and its risks, and we must act to manage these escalating risks today.