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.”