Swiss Re pledges funding, expertise to help strengthen climate resilience

Swiss Re announced earlier this week that is would pledge to offer US$10 billion in insurance capacity and expertise to help nations strengthen climate resilience and achieve stringent climate strategies required by 2020.

Swiss Re’s group CEO, Michel Liès, made the announcement while addressing government leaders at the United Nations-led Climate Summit in New York, which took place Tuesday.

“By the year 2020, Swiss Re commits to having advised 50 sovereigns and sub-sovereigns on climate risk resilience, and to have offered them protection of US$ 10 billion against this risk,” notes an article posted on Swiss Re’s website.

At the summit, attended by representatives from 125 countries, U.N. Secretary-General Ban Ki-moon put pressure on governments to adopt aggressive domestic strategies for reducing emissions and investing in clean energy technologies, the article states.

“We are running out of time. We can no longer afford the luxury of being gradual or incremental. We need very, very stark changes right away,” the article cites U.N. climate chief Christina Figueras as saying in advance of the summit.

Affirming the insurance industry’s commitment to work with the international community to help increase climate resilience, Liès noted that aligning capital and community interests via the mechanism of insurance is a very effective way forward. “This not only increases shock absorbing capacity, but adds rigor in terms of risk analysis and helps to incentivize risk reduction.”

He pointed out that although there have been some great examples where innovative sovereign climate risk financing solutions have been implemented, some 75% of “catastrophe losses around the world are still uninsured, and the signals to incentivize climate risk reduction are not yet strong enough.”

The good news is that as much as 65% of climate risks can be averted through conscious risk management and cost-effective resilience measures, Swiss Re suggests.