The financial industry needs to systematically screen climate change risks, according to a report by Allianz Group and WWF.
 | Climate Change & the Financial Sector: An Agenda for Action(click on the image to download the study) |
The Allianz and WWF report “Climate Change & the Financial Sector: An Agenda for Action” identifies risks for the sector which are due to climate change, and outlines specific steps for actions to better integrate risks from climate change into the insurance, banking and asset management business.
Basic Assumption
Climate change poses a major risk to the global economy: It affects the wealth of societies, the availability of resources, the price of energy and the value of companies. The financial industry has a two-fold responsibility. On the one hand, it needs to prepare itself for the negative effects that climate change may have on its business and on its customers. On the other hand, it can significantly help mitigate the economic risks and enter the low-carbon economy by providing appropriate products and services.
Impact on Business
Allianz as an insurance provider expects that insurance premiums may rise to cover the risks associated with climate change. "For our insurance business, climate change is increasing the potential of property damage at a rate of 2 to 4 percent per year," says Andrew Torrance, CEO of Allianz Cornhill, the UK-based insurance subsidiary. "In some cases this might result in property damage premium rises in some markets as insurers adjust their risk-based insurance cost models to reflect the increasing severity of climate change events.”
