Restricting global warming might not sound like it would require a huge exercise in risk management but the reality is quite different and insurance brokers can play a crucial part in managing climate related risk.
Head of Property and Engineering – Broker and Agency at Allianz Australia, Andrew Lester notes in the latest NIBA Broker Guide, that the Australian broker community does a fantastic job as advocates for clients and operating as trusted advisors in risk assessment and risk transfer solutions.
“Climate related risk is no different, in that by consulting with and helping their clients to understand the specifics of their current risk profile, as well as how future business strategy may be impacted by this changing risk profile is critical in determining the correct course of action,” he says.
Lester notes two key areas that brokers can use to benefit clients: information and education.
By focussing the client’s attention on risk assessment and understanding that risk mitigation has a direct link to the future health of their business.
And by keeping on top of the trends and ensuring early engagement with the risk transfer markets.
Things for insurance brokers to consider:
Climate change risk management approaches generally fall into four broad categories2:
• Mitigation—efforts to reduce greenhouse gas emissions
• Adaptation—increasing building resilience and capacity to cope with changes in climate
• Geoengineering/climate engineering—additional, deliberate manipulation that is intended to counteract some of the impacts of greenhouse gas emissions
• Knowledge-base expansion—efforts to learn and understand more about the climate system, which can help support proactive risk management.
You can access the full NIBA Allianz Broker Guide here.