Climate change & climate risk related news

The Insurance Development Forum (IDF) has named Ivo Menzinger of Swiss Re as the new Chair of its Operating Committee (OpCo), succeeding  Rowan Douglas CBE, CEO of Climate Risk & Resilience at Howden who had been instrumental in the creation of the IDF and chaired the OpCo since its launch.

According to global reinsurance giant Munich Re, both economic and insurance market losses from tropical cyclone activity around the globe in 2024 are “significantly higher” than averages, with the insured total for the year estimated at $51 billion.

Through its corporate foundation, France-headquartered global reinsurance company SCOR is backing a climate prediction market initiative named CRUCIAL (The Climate Risk and Uncertainty Collective Intelligence Laboratory) that looks to produce collective expert forecasts of climate-related risks.

COP 29, the United Nations Climate Change Conference held in Baku, Azerbaijan, has drawn to a close with agreement on certain areas and progress being made on the much-discussed Loss and Damage, as well as the Global Shield, two programs of some relevance to insurance, reinsurance and insurance-linked securities (ILS) markets.

Ceres, a non-profit that leads a national coalition of investors, environmental organisations and other public interest groups working to address global sustainability challenges, has highlighted parametric risk transfer, catastrophe bonds and ILS as innovative tools to address increasing climate risks and build a more resilient and sustainable insurance sector.

Analysts at Citigroup have highlighted a growing financing gap in climate adaptation efforts, saying that as this gap grows and steps to mitigate climate change remain at a pace considered too slow, there will be a need for increasing amounts of capital and catastrophe bonds are a useful structure that can be used in support.

The World Bank has approved the Regional Emergency Preparedness and Inclusive Recovery Program (REPAIR), which is designed to boost financial resilience against climate shocks for Eastern and Southern African countries and leverages private market parametric disaster insurance risk transfer alongside its contingent credit DDO solution.

The Chicago Mercantile Exchange (CME Group) has expanded its range of weather risk transfer products, with the recent launch of seasonal strip weather futures and options contracts.

“Insurance is the financial bedrock needed to de-risk investments and attract the additional capital necessary to mobilise the climate transition,” Rowan Douglas of Howden said today. To meet this goal, with exposure growing fast, there will be a significant need for more insurance capacity, with a role for the insurance-linked securities (ILS) market in delivering […]

Even in a state of increased event activity driven by a changing climate, allocating to insurance-linked strategies (ILS) can generate attractive returns for investors, according to a whitepaper from LGT ILS Partners, the specialist dedicated ILS investment unit of the private bank and asset manager LGT Capital Partners.