COP27: GFIA calls for collective action to prevent loss of life and reduce economic losses

8 November 2022

On the occasion of the COP27 UN conference in Sharm El Sheikh, Egypt, the Global Federation of Insurance Associations (GFIA) calls on the parties at COP27 to prioritise adaptation and the building of resilience to the impacts of climate change. GFIA reaffirms its commitment to fostering international dialogue and action to address climate change and its impacts.

GFIA represents insurers and reinsurers from 67 countries, ranging from small local players to internationally active groups. Many (re)insurers support the goals of the UN’s 2015 Paris Agreement at company level, through their participation in local or global financial sector net-zero alliances and through a wide variety of other actions.

The World Meteorological Organization reports that the number of climate-related disasters has increased fivefold over the last 50 years. According to the UN, the last seven years were the warmest on record globally, and the frequency and duration of droughts has increased by almost a third in 20 years.

The global impact on people, health, property, businesses and the environment from more frequent and severe extreme weather events is well documented. Insurance and reinsurance play a critical role in accepting the transfer of some of the risks these events present, but the gap between (re)insurance cover and wider economic loss is significant in many parts of the world.

Closing this protection gap requires a reduction in losses by investing in adaptation measures that mitigate risk. Without this, the gap will widen and so will the trauma for millions of people.

GFIA’s (re)insurers are playing an active part in responding to the challenges created by the impacts of climate change. (Re)insurers are key players at local, national, regional and international levels, contributing to climate adaptation and mitigation and risk reduction. Serving policyholders at all the milestones in their lives, (re)insurers play a crucial role in addressing climate-related risks, primarily through their measuring, pricing and assumption of risk and thus through their payment of insured claims — including life and health claims — from common and catastrophic events. Through their investment activities, they help the transition to greater sustainability of the real economy and climate action to meet the goals of the Paris Agreement.

Because of their awareness of the increasing potential for catastrophic weather risks as a result of a changing climate, (re)insurers recognise the need for society to adapt to the coming changes.

They also seek to encourage “build and rebuild better strategies” and provide advice and expertise to customers on how they can reduce their exposure and to public authorities on how policymaking can reduce risks.

To help society adapt to climate change, GFIA promotes the following key principles for more resilient and sustainable construction:

  • Build in a more resilient way by designing buildings to withstand the expected forces of nature over the planned lifespan of the structure.
  • Do not build in high-risk areas.
  • Where appropriate for the risks presented, build with green materials and circularity.
  • Support better resilience through defensive infrastructure and appropriate land-use planning and the location of buildings.

GFIA’s commitment to international engagement is firm and builds on its engagement at COP26 in Glasgow. It continues to exchange knowledge and best practices with international stakeholders on climate-related issues to bring to their attention the global (re)insurance industry’s climate-related positions, actions, commitments and concerns as well as to foster international dialogue.

(Re)insurers recognise that greenhouse gas reduction and climate adaption require societal resolve and action by individuals, governments and the private sector. (Re)insurers can function as lookouts, alerting others to increasing risk, and are willing to cooperate with all the various stakeholders in society. (Re)insurers reiterate their determination to put their experience, commitment and assets at the service of the ecological transition, to help close the protection gap and to help build a more resilient society.

As recent events underscore, there is an urgent need for all stakeholders to work together to prevent losses due to poor land use, building codes and infrastructure. GFIA therefore calls on all stakeholders to join with (re)insurers in their jurisdictions and globally to confront not only climate change but also preventable loss of life and economic damage.

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