The New Zealand Government has urged insurers to re-think their businesses to help combat the risks of global warming.  

 “You as insurers should be thinking about how your products, pricing and underwriting can be used to effect change in response to issues such as rising seas and warmer temperatures,” Environment Secretary Vicky Robertson told the Insurance Council of New Zealand Conference in Auckland.  

 She says insurers should start using sustainable insurance principles in their businesses, pointing out that under just-released Government proposals licensed insurers will need to disclose their climate risks.  

 “Rather than thinking solely about signalling risk, and fund recovery, there is opportunity for your sector to consider its far wider, longer-term connection to the economy.  

 “Insurers can also find solutions that address the transition impacts of a move to greater risk-based pricing. That is, don’t view the economic and social consequences of your pricing and underwriting decisions simply as externalities.”  

 Ms Robertson also challenged insurers to support their networks of suppliers and distributors to respond to climate change and use their influence to advocate for policy change and social action.  

 “Remember as you are factoring risk that climate change in this sense isn’t about your impact on the environment, it is about the environment’s impact on you and on your business.”  

 She says the increasing recognition of global warming risks is driving company boards and investment professionals in New Zealand to question what they can and should be doing to address them.  

 “However, if we are going to slow or reverse the current rate of climate change, we’ll need a substantial shift in regulatory policy as well as consumer and company behaviour – all of which could threaten traditional business models.”