The journey to net zero – An insurer’s guide to navigating climate risks and opportunities

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Tim Antonelli, CFA, FRM, SCR, Multi-Asset Strategist, Wellington Management
Adhiraj Maitra, Director, Insurance Climate Risk, Willis Towers Watson

Yingzhen Chuang, Deputy Head of International Catastrophe Analytics, Willis Towers Watson

For as long as weather and natural catastrophe models have existed, insurers and reinsurers have been responsible for the commercial assessment of natural disasters, primarily through underwriting and reserves management. Today, amid increasingly devastating consequences and rapidly rising costs of climate-related perils, (re)insurers are expected to play a larger role in helping society mitigate the effects of climate change, build resilience to its effects and support the transition to a low-carbon economy.

(Re)insurers have an opportunity to lead on these issues, building on their deep knowledge of physical risk, and strengthen their position in the marketplace by taking an enterprise-wide approach to climate change. Climate change is going to impact different parts of the business and hence it is important to take a holistic view of the business.

By understanding and managing climate risks on the assets and liabilities sides of the balance sheet and advancing climate-awareness in their own organizations, insurers can effectively navigate climate change. The increasing volatility of loss-causing climate-related events along with growing financial risks to assets in investment portfolios present a dual threat. However, climate uncertainty and the wide range of outcomes associated with climate change also present opportunities to develop a sustainable, progressive and commercially successful strategy for the business.

Wellington Management
Wellington Management

Insurers have been building investment partnerships with Wellington since 1975. With $150 bn assets under management as of Sept 30, 2021, our goals since then have remained evergreen – to exceed the investment objectives and service expectations of our clients. As an integral part of Wellington’s global investment platform, our dedicated Financial Reserves team offers a breadth and depth of resources and experience to serve our insurance clients as a go-to thought partner, risk manager, and trusted advisor for complex investment challenges. The new decade we have just entered looks more treacherous from a risk perspective than anyone could have imagined. Our collaborative strategic and proactive risk management approach helps our clients to be well-prepared.

Rich Coffman
Americas
rmcoffman@wellington.com
+1 617 951 5311

Max Davies, CFA
APAC
mdavies@wellington.com
+852 2846 6011

Sarah Marschok
Americas
smmarschok@wellington.com
+1 617 790 7170

Bob Sharma, CFA
EMEA
bssharma@wellington.com
+44 20 7126 6068

www.wellington.com/en

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