Climate change could make premiums unnecessary
Published : Monday, 17 February, 2020 at 4:41 PM Count : 203
Australia’s QBE Insurance Group, QBE.AX said on Monday that climate change could make some premiums unnecessary, especially for consumers exposed to extreme weather events and was a “material risk” to its operations around the world.
During 2019, QBE’s net Australia-Pacific cost of catastrophe claims jumped to $193 million from $106 million the year before, led by unprecedented floods in Australia’s north east coast and horrendous bushfires across the country’s south east.
The insurer stated that it has begun adjusting its catastrophic models to the expected effects of climate change by 2100 and will evaluate the impact of its weather-related exposure to emissions and temperature.
In the short-term, QBE’s capital planning will handle higher claims considering the frequency and severity of the event and set up a catastrophic reinsurance program, it said.
In the long run, it was hoped that the physical impacts of climate change would result in “our customers protecting their assets and increasing the insurance for the services they provide.”
“This could make insurance premiums unnecessary, especially for customers in more open areas of weather-related events, potentially reducing revenue.”
Insurers and banks are also facing tight regulatory oversight over their response to global warming, with shareholders expecting better disclosure and transparency about climate risk.
In announcing the annual climate, QBE says it plans to set up all direct insurance services for thermal coal customers by 2030 to reduce emissions attributable to global warming.-Internet