The Lloyd’s Market Association (LMA) has suggested that its members may be willing to underwrite increasing commercial activities in the Arctic region brought about by climate change.
“The Arctic is at the frontier of risk,” said Neil Roberts, (pic) head of marine and aviation at the LMA, adding that insurers assessing Arctic projects must consider environmental and social factors as well as commercial ones.
“An insurer’s role is to support commerce,” said Roberts. “In terms of whether we should be up there, that’s a wider moral question.”
Roberts was speaking as part of a Reuters Next conference held on 11 January.
The conference heard that climate change is opening the Arctic to more tourism, mining and shipping. For the insurance industry, this means an increased demand for cover, though there are considerable hurdles to overcome, not least a lack of data and experience in the region.
The issue is not without its complexities, especially with regard to any future mining activities in the region for fossil fuels.
The Lloyd’s Corporation and its members pledged last month to “start to phase out insurance cover for, and investments in, thermal coal-fired power plants, thermal coal mines, oil sands, or new Arctic energy exploration activities” from 1 January 2022.]
Also speaking was Ilarion Merculieff, president of the Global Center for Indigenous Leadership and Lifeways, who suggested that native peoples’ observations of changes in the Arctic – such as diseases in fish, or shifts in the time of year when mountain snow melts – are key to understanding how climate change affects the whole ecosystem:
“Native people see things as interdependent, interlocking and synergistically combined,” said Merculieff, who is an Unangan from the Pribilof Islands off the west coast of Alaska. “We maintain that we need to have our different perspectives involved in western science.”
Such observations are often not heeded by policymakers, he said.
Yet they could offer crucial clues about climate impacts in key economic sectors – the commercial seafood industry in Alaska generates $13.9 billion in annual economic output, according to a McDowell Group industry report last year.
Polar explorer Ann Daniels said tracking changes in the Arctic, such as the acidity of seawater, is the frontier of understanding climate impacts.
“It’s an indication of what is going to happen to the rest of the world,” said Daniels, who was one of the first women in history to reach the North and South Poles as part of all-women teams.