Short-term Insurance Strategic Risk Forum

Short-term Insurance Strategic Risk Forum

Short-term Insurance Strategic Risk ForumShort-term Insurance Strategic Risk Forum

Short-term Insurance Strategic Risk Forum

Short-term Insurance Strategic Risk Forum

Climate Changeand the

Insurance Industry

John MelvilleChairman: Strategic Risk Forum

10 June 2012

Climate Changeand the

Insurance Industry

John MelvilleChairman: Strategic Risk Forum

10 June 2012

Short-term Insurance Strategic Risk Forum

Short-term Insurance Strategic Risk Forum

The Issue

• Climate change driven by rising carbon dioxide levels and the greenhouse effect

• Climate change is driving • Rise in global average temperatures• Melting of polar ice caps• Increase in frequency of weather-related

natural hazards (storms and droughts)• Increase in frequency and severity of

natural disasters

Direct impact on the viability of insurance

Short-term Insurance Strategic Risk Forum

Short-term Insurance Strategic Risk Forum

Our Value Proposition

• Pool risk• Enables transfer of individual risk to collective

• Custodians of SA risk Pool• Understand risks• Influence behaviour of customers and investors• Ensure insurance industry continues to be

viable and affordable

• Key enabler of economic activity

Short-term Insurance Strategic Risk Forum

Short-term Insurance Strategic Risk Forum

The role of Insurance in the Economy

• A collective ‘safety net’ and a lever of economic and social development

• A key enabler and transmission mechanism for economic activity

• A catalyst in the financial and investment flows needed for sustainable development

Short-term Insurance Strategic Risk Forum

Short-term Insurance Strategic Risk Forum

The role of Insurance in the Economy

Without insurance, nothing is built, nobody works, nothing floats, nothing runs on tracks, and nothing ships. But in addition to that,

nothing is repaired. It rebuilds lives, cities, and companies.

The World Trade Center would not be rebuilt without the insurance industry, which pumped $4.4 billion into it.

Communities that are wiped out by hurricanes are rebuilt by the insurance industry.

Joe Plumeri, CEO Willis Group,

Insurance Conference 2012

Short-term Insurance Strategic Risk Forum

Short-term Insurance Strategic Risk Forum

Our ResponsibilityReduce carbon footprint and encourage others to do the same

Promote actions and behaviour that

specifically increases

resilience to storm, hail and drought

risk

Understand vulnerability profile of

our insured landscape in relation to storm,

hail and drought risk

This includes the actions and behavior of individuals, businesses, local authorities, and governments to increase resilience to risk

Short-term Insurance Strategic Risk Forum

Short-term Insurance Strategic Risk Forum

Our Future

• Role of the underwriter will assume greater importance

• Only risks meeting necessary standards will be insurable

• Investment in underwriting capabilities allowing for climate change will determine long-term success or failure

• Sustainability of insurance is vital from

economic perspective

+109590

Short-term Insurance Strategic Risk Forum

Short-term Insurance Strategic Risk Forum

Thank You