Insurance Times  ‘Environmental risks have again placed prominently in the World Economic Forum’s Global Risks report

Companies in the UK and around the world are sleep-walking into a catastrophe around environmental risk. This is according to Zurich’s group chief risk officer Alison Martin, who spoke to Insurance Times at the World Economic Forum’s launch of the Global Risks report in London. Environmental risks continue to be among respondents’ biggest concerns over what are the biggest global risks. All five of the environmental risks the report tracks are again in the high-impact, high-likelihood category: biodiversity loss; extreme weather events; failure of climate-change mitigation and adaptation; man-made disasters; and natural disasters.

Martin told Insurance Times that brokers must advise their clients on the increasing risk. She said brokers should take particular notice of the flood risk in the UK. “We will see increased storm activity,” Martin warned. “Not necessarily increasing frequency of storms, but increasing activity in the storms themselves. That means rain and that means flood. “Those are risks that we recommend people most quickly ensure they are ready for.”

She said in future year’s insurers should be better prepared for more cold snaps like the Beast from the East weather event which took a hit on many underwriters in 2018.  And key to this is customers taking risk-mitigation steps. Martin said that every customer should have a climate resilience adaptation strategy to deal with adverse weather at home and abroad if, for example, an earthquake in Thailand affected the supply chain. Martin added: “If we see the physical effects of climate change then sadly we will see greater claims costs.

“That is unless people choose to move away from where the risk areas are. If we move away from coastal areas and floodplains that may reduce some of the risk.

“Conversations need to have with customers on looking at their climate risk assessments – how exposed are they, what might happen to them in future.”  Click here to read more