Insurance Companies: The Last Line of Defense Against Climate Change?
By incentivizing sustainable behavior, insurance companies have emerged as allies in mitigating the climate crisis. Moderated by Ellen Jorgensen (Aanika Biosciences), this panel discussion with Jon Shieber (FootPrint Coalition), Stephen Weinstein (Bermuda Business Development Agency) and Vishaal Bhuyan (Aanika Biosciences) illustrates how powerful this quiet force of positive change can be.
Climate-related insured losses are on the rise, Stephen Weinstein shows in his presentation that kicks off the session. They total “hundreds of billions [of dollars] annually”, the former insurance executive says. And they keep growing: “This is an increasing hazard. The main driver of that change is climate.”
Weinstein sees an urgent need to adjust regulations. “Many of us like to live on beaches or rivers, or in places like Northern California, where it’s gorgeous”, he says, pointing out that U.S. citizens can get flood insurance “really really cheaply” from the federal government. “So in a sense, we’re sending people signals to go live where it’s dangerous, and to build without regard to their safety.”
Currently, too much reponsibility for climate action is put on individuals, Jon Shieber believes. “It’s your carbon footprint. It’s you eating meat, it’s your driving an internal combustion engine, you flying a plane.”
But the problem, he emphasizes, “is not you. It’s that the systems haven’t evolved to account for sustainability and climate change.”
What insurance companies can do is “drive down the costs or encourage adoption” of new solutions, Shieber argues.
Key to this change will be reliable data to measure positive effects, all participants agree. One solution could come from a novel tracking technology that promises to bring more transparency to business processes.
“We’ve developed an organism that we can apply to products, food products or otherwise to trace them through the supply chain”, Vishaal Bhuyan explains. This helps to “ensure companies are making the right decisions in terms of the ingredients that they use and the products they use“.
Weinstein sees a lot of potential for sustainability solutions. “It’s one of the things I love about your product”, he tells Bhuyan. “Insurers and reinsurers love data. And they can deliver savings through data, but it has to be validated.”
Shieber compares the technology to a “biological blockchain that you can attach to things and really get a sense of verification across the board.”
Bermuda Business Development Agency
Stephen was elected Chair of the Bermuda Business Development Agency in 2020 and has been a member of the board since 2016. From 2002 until 2021 he served as Executive Vice President and Chief Legal Officer of RenaissanceRe Holdings Ltd. He also serves on the President’s Advisory Counsel for the National Wildlife Federation.
Jonathan Shieber is the chief editor and a venture partner with Robert Downey Jr.’s FootPrint Coalition. He previously served as a senior editor for TechCrunch, following a 9 year stint with Dow Jones and The Wall Street Journal covering sustainability, climate, and energy investing.
Vishaal co-founded Aanika Biosciences with Ellen Jorgensen in 2018. He spent over a decade in the investing space and served as a portfolio manager of a $1 billion multi-strategy hedge fund. Vishaal has been featured in a number of publications such as the Wall Street Journal, New York Times and CNET.
Dr. Ellen Jorgensen cofounded Aanika Biosciences, a biotech startup that enables sustainable practices by using microbes to track, trace and authenticate products throughout supply chains. She holds a Ph.D. in Cell & Molecular Biology from New York University and has spent over 30 years in the biotechnology industry.