Insurance, Climate Change and the Law

The insurance industry has found itself at the front line of climate change challenges, providing insurance cover in relation to risks associated with climate change. As risk carriers, insurers pay claims for climate change related losses - such as property damage caused by windstorms, flooding, and wildfires - which have been increasing in frequency and severity.

As major institutional investors, insurance companies invest in assets that may be increasingly vulnerable to climate risks. Insurance regulators across the globe have therefore started to require insurance companies to identify, manage, and report on climate change risks that could pose a threat to their financial stability. However, managing and reporting on the effect of climate risk on an insurer-s balance sheet is an inward-looking perspective that does not stem climate change. It needs to be paired with an outward-looking perspective that takes account of the insurance industry-s impact on the environment and t