Principles for Sustainable Insurance TCFD pilot
Description: A partnership involving the world’s largest insurers — representing around 10% of world premium and US$5tn in AUM — to develop a standard approach for climate risk disclosure for the insurance industry.
- Define climate scenarios to model.
- Develop risk and opportunity heat maps from those scenarios.
- Demonstrate financial and qualitative impacts of climate change on the insurance business.
- Develop the modelling and assessment approach.
IAG activities: IAG, through its work on physical risks led by the Natural Perils team, contributed to the modelling and development of industry-appropriate climate-related benchmarks. The findings were published in Insuring the climate transition, enhancing the insurance industry’s assessment of climate change futures released in January 2021.
US National Center for Atmospheric Research (NCAR)
Description: NCAR works with private and public partnerships to meet the demands of scientific challenges. NCAR is an international leader in climate science by improving our understanding of changes to climate and severe weather under past, present and future scenarios.
Objectives: IAG and NCAR work on joint initiatives to apply the latest climate modelling to better understand how weather events like tropical cyclones, hailstorms and rainfall, will change in the future, and publish findings through peer-reviewed journal articles in 2020.
IAG activities: In November 2020 IAG released the second edition of Severe Weather in a Changing Climate in partnership with NCAR. The report builds on the first report which was released in 2019 by incorporating the latest science and feedback and contribution from the local science industry and abroad. It discusses the changing risk of multiple types of natural disasters impacting Australia. In contributing to the report, IAG made a deliberate decision to publish its internal research to help other stakeholders across our industry better understand physical climate risk.
The Geneva Association
Description: As the leading international think tank of the insurance industry, The Geneva Association has prioritised Climate Change and Emerging Environmental Topics as one of seven research topics.
Objectives: To identify the role insurers and other stakeholders can play to help mitigate and adapt to the challenges of climate change.
IAG activities: IAG collaborated with the Geneva Association on a new Flood Risk Management in Australia report, which was part of the Building Flood Resilience in a Changing Climate series. The report noted the high levels of insurance penetration but also called for flood management funding to be reallocated from response and recovery to mitigation and resilience.