Actuaries will need to develop mitigation and financing strategies to handle sustainability risks, according to discussion at the Casualty Actuarial Society Spring Meeting.
"Sustainability risks are going to have a substantial impact on risk management and insurance, specifically on actuaries, who need to consider these risks in setting premiums and loss reserves," said Dan Anderson, a professor of actuarial science, risk management and insurance, at University of Wisconsin.
While claims-made policies should help to mitigate D&O, chemical, pollution and discrimination claims, Anderson said that in the case of global warming and climate change, claims may fall under occurrence policies which could trigger many policy years.
Rod Taylor, managing director of Aon Environmental Services Group, explained there are risks that companies and their insurers face from sustainability issues. Taylor said that global warming and climate change exclusions are already being seen in some general excess liability insurance policies.
"These are being issued to certain kinds of business and you are going to see more of them issued to companies in the petroleum, auto manufacturing and power generation industries," he said, adding: "Going forward I think it is going to be very difficult for certain industries to get coverage for global warming."
For more information, visit www.casact.org/.
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