Its that time of year for the annual chat with my insurance broker and finding out what’s been going on in his world over the last twelve months. And it’s not looking good.
Like any casino economy, the insurance industry only offer games that ensure the house wins. There are two fronts that the insurers are currently fighting; claims for loss of business due to the pandemic (yes, I thought that one had been decided as well . . . but, apparently not) and the ongoing and ever-rising claims for extreme weather events – flooding, in particular, as far as the UK is concerned.
Offering protection against a pandemic was good business provided there was little likelihood of there actually being a pandemic; and protection against extreme weather events was good business, provided . . . etc. Insurance has never been about protection against something happening, it’s always been about betting on that thing not happening; that’s why a lot of underwriters are very wealthy people. But once the odds change, that game gets withdrawn – leaving just an empty space on the casino floor, full of bad memories.
‘Worst case scenario’
Sir James Bevan is the chief executive of the Environment Agency and last week he raised the stakes on the climate crisis. Speaking on a panel at the Association of British Insurers annual conference he said that weather events that we’re currently experiencing have already met, and are exceeding, the ‘reasonable worst case’ scenarios that had been established by the EA for the UK. He is urging politicians to take action to reduce emissions and to enable us to adapt to the ‘inevitable’ impacts of climate emergency.
He said: “If [this] sounds like science fiction let me tell you something you need to know. This is that over the last few years the reasonable worst case for several of the flood incidents the EA has responded to has actually happened, and it’s getting larger.
“That is why our thinking needs to change faster than the climate. And why our response needs to match the scale of the challenge.”
Bevan is asking that government, and the public, put the climate crisis on the same urgent footing as the current pandemic.
He makes the point that “We will get the environment we pay for; we will get the climate we work for.”
What does this have to do with the price of a light fitting?
All of the ‘climate conversation’ is currently around manufacturers embracing the Circular Economy. Its absolutely essential that we act sustainably and accept our role as stewards of the natural environment, but there is so much more that we need to get to grips with if we’re to mitigate – not to remove, just lessen – the impact of climate change.
You’ll know it’s a problem once the insurers turn down requests for environmental cover, and by then it’s likely to be too late. Oh – that’s already happening, you say?
We published a podcast on this topic about six months ago. Its worth a re-view, we think: