Insurance professionals discuss ways to tackle climate change through risk underwriting and impact investment
10 January 2022
Climate change has become an imminent threat facing humanity. While governments worldwide have worked out action plans to combat its impacts, the insurance industry has also been playing a vital role in the joint effort in managing and mitigating climate-related risks. The Insurance Authority (IA) hosted a thematic breakout session titled “Innovating Insurance to Combat Climate Change” today (10 January 2022) at the Asian Financial Forum (AFF) 1 , where insurance professionals shared about the industry’s participation in initiatives for addressing climate change, and the emerging opportunities ahead.
“Hong Kong endeavours to play its part in combating climate change and consolidate its status as a regional green and sustainable finance hub,” said Mr Tony Chan, Associate Director, Policy and Development of the IA. “The IA has been actively participating in the Green and Sustainable Finance Cross-Agency Steering Group to steer initiatives, and encouraging the industry to contribute to the cause in a multi-pronged approach through public advocacy, corporate disclosure, risk modelling, differential underwriting, product innovation and impact investment.”
The panel, composed of senior executives from two insurers, a reinsurer and an insurance broker company, discussed the implications of local and global climate-related initiatives on the insurance industry, including the Common Ground Taxonomy which provides reference for identifying environmentally sustainable activities, and growing needs for climate-related risk management, from the perspectives of a risk underwriter and an impact investor. The panelists also talked about challenges they encountered, such as climate-related data needs and gaps.
The growing attention on green and sustainable finance presents enormous business opportunities and solutions for the insurance and risk management sectors, an example of which is the first issuance of a catastrophe bond in Hong Kong last October. The panelists shared their insights on other areas of potential opportunities, such as the development of index-based or parametric products and solutions for mitigating climate-related risks.
“As part of our effort to consolidate Hong Kong’s status as a global risk management centre, the IA will continue to nurture a vibrant ecosystem for green insurance with a view to enabling the insurance industry to develop while delivering its social value,” Mr Chan added.
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Asia’s premier platform for global leaders in government, finance and business to exchange insights, intelligence as well as to explore business and investment opportunities. More than 66,000 viewers from 82 countries and regions had visited the AFF 2021 for thought leadership and business networking, and to experience the latest fintech innovations and next-generation business ideas.
The Insurance Authority (IA) hosted a thematic breakout session to discuss with insurance professionals how the industry can participate in initiatives for addressing climate change, and the emerging opportunities ahead.