North American insurers fall behind on climate change
Environmental Finance, 15 July 2005 – Insurance companies based in North America are failing to assess non-traditional sources of risk, particularly those posed by climate change, as effectively as their European counterparts, according to a report* from Innovest Strategic Value Advisors.
“Although there is continued debate regarding the increasing frequency of extreme events, climate change may already be “¦ pressuring both reinsurers and insurers,” says Brigid Barnett, a senior analyst at the New York-based socially responsible investment research firm. “Incorporating the risks of climate change into products and investment strategies is likely to be an increasingly important element of business success.”
Following analysis of 31 North American insurance firms, the report concludes that the companies showing the clearest commitment to sustainability issues are two Canadian life and health insurance companies, Sun Life and Manulife, and US property and casualty insurer Allstate.
However, “North American insurers as a group lag far behind their European counterparts, particularly with respect to the growing risks from climate change,” says Innovest.
They also “have significantly less disclosure on policies and programmes addressing social and environmental issues relevant to their business” and most lack a “broad corporate social responsibility strategy”.
Adding a note of optimism, the report says that the strengthening commitment to social and environmental issues shown by market leaders such as AIG could lead to improvements throughout the sector.
* North American Insurance Sector Report: A comparative analysis of company performance on intangible investment risk factors and value drivers, www.innovestgroup.com
This article is reproduced with kind permission of Environmental Finance magazine.
For more news and articles visit www.environmental-finance.com or
subscribe to Environmental Finance.