Climate risk data sought from US Insurers
The US Treasury is proposing requiring insurers to provide underwriting data, broken down by zip code, to help them understand risks of major disruptions in insurance coverage in different areas of the country driven by climate change.
Summary: The US Treasury is proposing requiring insurers to provide underwriting data, broken down by zip code, to help them understand risks of major disruptions in insurance coverage in different areas of the country driven by climate change. The move has prompted push-back from various groups including the US Chamber of Commerce and insurance industry groups citing increased costs.
Why this is important: Global natural catastrophe losses in 2022 are tracking 38% higher than 10-year averages. The industry is most likely not adequately factoring in the impact of climate change in pricing.
The big theme: We are used to the traditional finance and business world being divided along industry or sector lines - silos really. Sustainability illustrates how interconnected themes and ultimately industries are. A holistic approach is necessary to enable an effective transition. The finance industry can play an important role in the transition through its funding and investing activities. Insurance companies can play a triple role through their choice of projects to underwrite, their choice of investments and activities in the sustainability space that ultimately reduce the risk they are underwriting.
The details
Summary of a story from The Financial Times:
The number of natural disasters causing more than $1 billion in damages has risen steadily for more than 15 years. Against that backdrop, the US Treasury has put forward a proposal requiring insurers to provide five years' worth of underwriting data, broken down by zip code, to help them understand risks of major disruptions in insurance coverage in different areas of the country.
