The insurance industry needs to “step up” and do more to prepare communities for climate change, according to Zurich’s head of sustainability Francis Bouchard.
Insurers need to get their “loafers dirty” and become more involved in risk mitigation, he said at the Insurance Information Institute’s (III) Joint Industry Forum in New York.
Climate change was “one of the most dangerous and most complex risks we face,” he added. “People are expecting us to step up.”
Bouchard continued: “We need to get our loafers dirty and actually start driving and catalysing projects at a local level will actually produce resilience."
He said the industry needed to work more closely with government agencies such as the Federal Emergency Management Agency (Fema) to improve climate resilience.
The executive added that the wider public often got a bad impression of the insurance industry, but with the onset of climate change carriers have the chance to play a “white-hat role”.
A recent survey by Zurich, the World Economic Forum and Marsh & McLennan Companies Zurich issued ahead of the Davos summit this month found that climate change is the biggest threat to global stability.
Also featuring on the panel at the forum was Fema deputy administrator for resilience Daniel Kaniewski, who said it could be argued that the agency created a “moral hazard” by giving people false hope that the federal government would come to their assistance in the aftermath of a disaster, “with us coming in with what is perceived to be bags of money to help individual disaster survivors and governments recover”.
He said the public had “a wrong perception… that we're going to make you whole, and that is false”.
Kaniewski noted that in the aftermath of Hurricane Harvey, on average disaster survivors received $3,000 in Fema aid, but those with flood insurance received an average of $117,000.
He called the single-digit take-up rates for flood and earthquake insurance “unacceptable”.
“We know that insurance is a great way to financially recover from a disaster,” he said. “We need preparedness mitigation and insurance.”