IAG and QBE have joined 14 other insurers from around the world in a UN initiative to better understand climate change impacts on their business.

The UN Environment Finance Initiative pilot group, which represents about 10% of global premium, has been formed to develop analytical tools to measure industry climate risks.

UN Environment Chief Erik Solheim says the insurance industry has served as “society’s early warning system and risk manager” for generations, and climate change risk is a serious threat.

“An uninsurable world is a price that society could not afford,” he said. “That is why UN Environment is working with leading insurers to understand and reduce risk, to seize unprecedented business opportunities in climate action and to ensure an insurable, resilient and sustainable world.”

The work will focus on assessing climate risks in core insurance portfolios and products, rather than on global assets under management held by the companies.

QBE CEO Pat Regan says climate is a priority issue for the international company, and the pilot group will help it progress its approach to climate scenario analysis modelling. “We look forward to collaborating with our peers on this collective challenge.”

The UN Environment Finance Initiative has also convened similar work by banks and investors ahead of a summit in New York next September that aims to drive further action to achieve emissions targets.

“The insurance industry has long understood the risk of climate change on our communities and customers, and it is vital that the financial sector works collectively to share our knowledge and create a framework for transparent and sustainable operations and reporting,” IAG CEO Peter Harmer said.

The other participants are Allianz, Axa, Intact Financial Corporation, Lansforsakringar Sak, Mapfre, MS&AD, Munich Re, NN Group, Sompo Japan Nipponkoa, Storebrand, Swiss Re, TD Insurance, The Co-operators and Tokio Marine & Nichido.