Canada is this week hosting the third of seven United Nations conferences to develop a set of sustainability principles for the insurance industry.
Insurance industry CEOs and other senior executives from Bermuda, Canada and the United States are attending the consultation meeting for North America, which represents roughly one-third of world insurance premium volume.
The meeting is hosted by the Canadian insurer, The Co-operators, in Guelph, Ontario.
Once fully fleshed out, the United Nations Environment Program Finance Initiative’s Principles for Sustainable Insurance (UNEP FI-PSI) will serve as the global framework for insurance companies to better manage environmental, social and governance risks and opportunities in their core business strategies and operations. The principles will include concrete actions to enhance risk management and underwriting practices, stimulate innovative insurance solutions, and catalyze industry action on a range of sustainability issues such as natural catastrophe risks, climate change, ecosystem degradation, ageing populations and emerging health risks.
“The sharp increase in natural catastrophes, extreme weather events, and environmental disasters are taking a huge toll on populations, economies, governments and the insurance industry. Greater public-private collaboration is needed to reduce risk and develop appropriate solutions, and the insurance industry can contribute significantly with its risk management expertise,” said Kathy Bardswick, president and CEO of The Co-operators.
“Proper management of environmental, social and governance risks is crucial not only to the health and safety of our communities, but also to our ongoing economic prosperity,” she said.
Storms, tornadoes, floods and other severe weather conditions in North America resulted in over $ 15 billion of insured losses and $20 billion of economic losses in 2010, according to Swiss Re.
This year has also witnessed the deadly tornado in Missouri, massive flood events in Canada and the United States, and wildfires in Slave Lake, Alberta that have collectively resulted in hundreds of fatalities, thousands of injuries, and billions of dollars in total damages to property, agriculture and infrastructure.
“The shared goal of UNEP FI insurance partners worldwide is to catalysz a positive transformation in the insurance industry so that it can better manage emerging and systemic risks, propel the transition to a low carbon, resource efficient and inclusive economy, and ultimately advance the sustainable development of societies,” said UNEP FI’s head Paul Clements-Hunt.
The global consultation process started in Africa, Latin America and the Caribbean. Following North America, the meetings will span Oceania, the Middle East and North Africa, Europe and Asia.
The final principles will be launched at the 2012 United Nations Conference on Sustainable Development in Rio de Janeiro, Brazil as a landmark contribution and long-term commitment of the global insurance industry to building a sustainable global economy