The worldwide increase in the frequency and severity of weather events in recent years has led to an increase in economic and insured losses. Societies will have to adapt to new climate conditions and work to increase resilience.
Financial risks and opportunities are becoming more material given climate change impacts, with government and industry taking actions to address this. Twelve Capital has a clear approach towards integrating Climate Sustainability into the overall investment process.
Some of the key climate change issues facing the industry are:
- Insurance is in the vanguard of protection against catastrophic risk for society, and as such will bear the brunt of the impact from changes in risk;
- Losses from perils such as severe convective storms or wildfires are seeing their frequency increasing;
- Working to identifying the insurers who develop their own views of risk and apply it to the modelling, pricing, and risk management will outperform their peers, thus generating better returns.