Munich Re: market has crucial role to play in addressing climate change

The (re)insurance industry can play a pivotal role in tackling the threat of climate change and can play a decisive role by reinforcing its message through the sharing of data, according to Tim Jehnichen, general manager of Munich Re in Madrid.

Jehnichen was speaking as part of panel discussion as part of the latest International Global Risks Seminar, hosted by Spain’s Mapfre.

“When it comes to prevention, we have been very much in favour of taking decisive action against climate change; we are now five years into the Paris Agreement,” he said.

On the one hand, he added, demand for insurance will increase as a result of an expected increase in climate-related catastrophe activity, but really that demand needs to be weighed against a bigger societal impact in terms of a higher frequency of losses and greater damages:

“It’s a question of us really taking decisive action. We are all tightening our policies on industries that have a negative impact on climate change. Prevention is key, but it will take time. Many governments have said that they will reduce carbon dioxide emissions and there has been a reduction, with coronavirus helping a bit but it was just a blip.”

“What is really needed is profound change,” Jehnichen noted, suggesting that the (re)insurance industry has an important role to play in explaining the consequences of climate change to society and what will happen if we don’t do anything, and can help underpin such a message through the sharing of statistics.

Also speaking at the presentation was Javier san Basilio, CUO of Mapfre Re, who addressed the need for greater market collaboration when it comes to loss data for secondary perils. He said there is a need to find a way to model these events, which are often more regional in nature than traditional large-scale catastrophes, and that there is a need to work together as an industry to produce such models.

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