The executives will present a position paper to the Third Conference of Parties to the United Nations Convention on Climate Change highlighting the industryþs worry about humankind's contribution to global warming and climate change.
The paper will note that, while the effect of climate change on the frequency or severity of extreme weather events remains unknown, it is clear that even small changes in regional storm patterns or in the hydrological cycle could lead to increased property damage.
The insurers will also point out that climate change has potentially large implications for investment activities. As governments, investors, and consumers anticipate and try to adapt to a new climate regime, some products and services will become less attractive, while others become more so.
"In discussions on limiting emissions, the most prominent industry voices are often those that highlight the possible negative impacts of emissions-reduction policies on the economy and on employment," said Ms. Elizabeth Dowdeswell, Executive Director of the United Nations Environment Programme (UNEP). "The insurance industry is telling us about the other side of the coin - about the economic costs of not reducing emissions. Insurers know from experience how expensive it can be when people fail to protect themselves adequately from risks. We must listen to them," she said.
The insurance industry position paper highlights the importance of the precautionary principle. The insurers are urging governments to promote scientific research that will establish what threshold level of atmospheric concentrations of greenhouse gases should be considered dangerous. They also support the use of market-based instruments and the transfer of cleaner technology to manage climatic risk.
The companies involved are members of the UNEP Insurance Initiative on Sustainable Development and the Environment. The Initiatve was launched when insurers signed a Statement of Environmental Commitment by the Insurance Industry in 1995. The Statement commits its signatories to incorporate environmental considerations into their operations and to adopt best practices.
The insurance industry has suffered from a series of "billion dollar" storms since 1987. This has led to a strong increase in claims, reduced availability of insurance coverage and higher premiums. Property insurance is particularly affected.
The implications of climate change for financial services other than property insurance are less clear. Changes in human health may affect the life insurance and pension industries. Banking may be vulnerable to repercussions from property damage, particularly if the insurance industry reduces its involvement in vulnerable areas. The economies of certain regions, such as coastal areas and small islands, may be affected.
Note to journalists:
The position paper will be presented during a workshop in Kyoto, Climate Change from an Insurance Industry Perspective, on Friday 5 December 1997 from 13:00 to 15:00.
For more information contact:
Mr. Michael Williams,
UNEP Media Officer, in Japan,
tel: +81-20- 229-0209,
Mr. Bernd Schanzenbacher,
UNEP Programme Officer,
tel: +41-22-979-9302, fax: +41-22-7969240,
or Mr. Satoshi Toyama,
Sumitomo Marine and Fire,
tel: +81-3- 3297-6796, fax: +81-3-3297-6904,
Mr. Robert Bisset,
UNEP Media and Communications Officer
Tel: +254-2-623084, Fax: +254-2-623692,
UNEP News Release 1997/70