Whatever insurers may think about the presence or causes of climate change, one thing is certain: the business climate is changing, rapidly.
New technologies are entering the market for saving and supplying cleaner energy in buildings, transport, and industry—and insureds are adopting these “green” technologies left and right. Renewable energy investment around the world topped $257 billion in 2011 (80% of the investment in fossil fuel capacity), approaching half of all new electrical generating capacity globally. Energy efficiency and “green-buildings” have also become multi-billion-dollar markets, and growth is showing no signs of slowing.
Beyond mitigating climate change, green technologies can even reduce conventional risks. Many insurers note that dual-paned windows are more fire-safe than single-paned ones (failing more slowly under heat stress, thereby helping block and keep down the supply of air to the fire). Pay-as-you-drive insurance helps reduce emissions from cars by rewarding reduced driving while lowering the probability of accidents. There is a long list of similar win-win strategies.
Insurers are even finding that some strategies reduce emissions while helping directly fortify infrastructure against climate change impacts. Tokio Marine knows this, and has for over a decade been replanting mangrove forests across seven Pacific-rim countries for the dual purposes of pulling carbon-dioxide out of the atmosphere and reducing storm damages.