The prospect of global climate change presents challenges to all sectors of society. Property insurance and reinsurance companies primarily in Europe and Japan were among the first companies to recognize their exposure to losses due to climate change. This effort has evolved into an international initiative with the support of over 70 insurance companies worldwide and the United Nations Environmental Programme (UNEP). To date, an insurance industry initiative sponsored by the DOE and EPA through the Center for Building Sciences has worked to inform U.S. property/casualty insurers about the benefits of energy efficiency and the UNEP effort.
Other recent efforts include seminars sponsored by the National Renewable Energies Laboratory and the National Association of Independent Insurers on Solar Energy and the Insurance Industry. This report identifies and discusses global climate change risks for the life/health insurance community and the potential opportunities for partnership with the life/health insurance community to address the causes and impacts of global climate change. The report will consider the prospects for constructive engagement with the life insurance industry separately from the health industry. Since managed care has resulted in significant reorganization among health insurers and integration of insurers with health care providers, this report also considers partnership opportunities with health care providers.
Section I. Projected impacts of global climate change on business opportunities, including IPCC related assessment and reactions from business sponsored think tanks
Section II. Overview of major trends affecting the life insurance companies
Section III. Opportunities for partnership with life insurance companies
Section IV. Overview of major trends affecting the health care insurance industry
Section V. Opportunities for partnership with health care insurance industry
Section VI. Loss Prevention Benefits of Energy Efficiency)
Section VII. Conclusions
Section I focuses on the enhanced risk of illness related to vector and water borne diseases, flooding, heat related stress, the interactions of increased heat and air pollution, particulate matter, food and water supply limitations, and the impact of IMF debt obligations on countries’ public health efforts. Some discussion is directed at the arguments of climate change skeptics especially in regards to vector-borne diseases and heat-related stress.
Sections II and III aim to identify trends that have relevance for initiating partnerships with the life insurance industry. For life insurance, these issues include increased competition and consolidation within the financial services industry, expense control, and opportunities for expansion abroad. Opportunities for partnership take into account the rapid and sizable growth in socially screened investment funds offered by several competitors in the financial services industry. Life insurers could capture a portion of this market with promotions of investments for policyholders in energy efficiency and renewables. Another opportunity recognizes the high rates of premium growth in foreign markets yet greater potential public health risks in these emerging insurance markets due to IMF restructuring obligations. In perhaps the most sought after market for expansion, China, environmental health risks including air and climate-related concerns recently have received high-profile international attention, and thereby might create opportunities for direct or policy holder investments in energy efficiency technologies. This report does not address the incorporation of energy efficient technology into insurance company real estate holdings given EPA research to date on this issue.
For health insurance, sections IV and V cover similar themes of consolidation and increased competition, the dominance of managed care delivery, the backlash against managed care, regulatory concerns for non-profit managed care organizations, and the trend towards partnership with public health interests. Opportunities are growing for collaboration among public health groups, managed care organizations and health care providers due to 1) ever increasing coverage of Medicaid and Medicare groups under managed care and 2) the consolidation of health carriers and providers under financial contracts that favor reduced utilization of health care services. Increased interest in public health concerns could create opportunities for partnership with managed care organizations and health care providers to take action on climate change, IAQ and energy efficiency. The potential for partnership may benefit from existing climate change priorities among public health agencies and some physicians groups. This report can only be considered an initial assessment of the opportunities for partnership with life insurance and health care organizations.
Download
Global Climate Change and its Implications for Life Insurance and Health Organization
