As part of a very busy Climate Week, Marsh McLennan was honored to host a roundtable dialogue at our New York City offices with United Nations Climate Change High-Level Champion Dr. Mahmoud Moheildin and prominent insurance industry representatives.
The topic covered was the role the insurance sector can play in helping to accelerate and scale climate adaptation.
The discussion was based on the Race to Resilience, a UN global campaign established to catalyze public and private sector commitments and action to advance climate risk adaptation as well as reduction. The campaign focuses on helping vulnerable communities build resilience and adapt to impacts of climate change, such as extreme heat, drought, flooding, and rising sea-levels.
Marsh McLennan has partnered with the Race to Resilience initiative, the Adrienne Arsht-Rockefeller Foundation Resilience Center, and UN high-level climate champions, like Dr. Moheildin, to mobilize the insurance industry to advance pre-event climate risk reduction. It is the hope that through new thinking, the insurance sector can build on its legacy of helping society cope with evolving risks and play a leading role in facilitating action on the climate crisis.
The dialogue also stemmed from the Sharm el-Sheikh Adaptation Agenda, first launched at last year’s COP27 conference, which calls on the insurance sector to become more engaged in progressing local climate adaptation projects — in support of the Race to Resilience‘s goal of building the resilience of four billion people. The agenda calls on the global insurance sector to increase its role as a key partner, collaborator, and catalyst in de-risking, financing, and accelerating climate adaptation.
The conversation — which also touched on key resilience topics, such as the evolution of the Global Shield Against Climate Risks and the ongoing negotiations over the “loss and damage” agreement —illuminated some of the challenges and opportunities that insurers face when seeking to reduce climate risk in exposed communities.
Marsh McLennan, a leader in resilience, is taking its own actions to advance that goal and the missions of the Race to Resilience and the Sharm el-Sheikh Adaptation Agenda.
Examples of our pre-event climate risk reduction work include:
- Blue Marble works with local insurance companies to deliver affordable insurance protection programs to benefit low-income families and small businesses in emerging markets.
- A Guy Carpenter project in New York City explored community-based catastrophe insurance (CBCI), using parametric triggers to provide flood coverage to lower income residents. We’re now in discussions with a dozen other communities about deploying similar structures across the US.
- The Insurance Development Forum (IDF) seeks to optimize and extend the use of insurance and its related risk management capabilities to build greater resilience and protection for people, communities, businesses, and public institutions that are vulnerable to disasters and their associated economic shocks.
- The Extreme Heat Resilience Alliance (EHRA) aims to create a new set of parametric instruments as part of the Cool Capital Stack.
- Marsh McLennan is represented on the board of InnSure, a mission-driven nonprofit dedicated to harnessing the power of the insurance industry to combat climate change.
The journey to a zero carbon and climate resilient planet, however, is still a long one. In his Climate Week remarks, Dr. Moheildin emphasized that scaling climate risk reduction and adaptation will require an unprecedented level of collaboration from all corners of the world — including insurance, NGOs, governments, and development agencies. His challenge to the insurance industry is to play a critical role in helping communities cope with climate change, not just through innovative risk transfer mechanisms but by actively deploying its capabilities to flatten the climate risk curve.