Insurance Hurdles to Protecting Coasts & Ports

How can we prepare the world’s #ports #coasts and #sids for sea level rise and storm surges - beyond anything we’ve seen before? Ports are the gateways for development and the hubs controlling maritime industries. So they are especially important to protect.

Today #climateinsurance offers a variety of #catrisktools as described by IDF. The #insuranceindustry helps with risk modelling, pricing and innovation in risk transfer solutions. As investors, the industry’s asset-liability approach is constrained by fiduciary duties and regulations.

Whilst basic #esg and #climaterisk factors are now standard, many hurdles remain to creating more risk transfer solutions*:

• Limited access to risk information and related risk pricing difficulties

• Public policy, regulatory and legislative issues

• Lack of awareness about insurance

• Weakness of domestic insurance markets

• Limited take-up of disaster insurance

• Regulatory barriers to access global reinsurance

• Scalability and sustainability of insurance programmes

We also have hurdles to scaling up green investments:

• Limited capacity of the markets to accommodate large-scale portfolio allocations to green

• Need for well-defined asset classifications, standards and methodologies for assessing green investments

• Fragmentation in climate policies and regulations that impact investors’ confidence

• Regulatory risk capital charges that could restrain long-term green investments

• Lack of appropriate price signals, such as failure to price carbon

• Need for green technology investment opportunities and structures that better satisfy the insurance industry’s risk appetite

• Data and transparency for informed investing

Regulators, capital markets and data providers need to address these hurdles urgently. Without a more diverse offering and deep investor support, ports, coasts and islands are on the front lines of #climatechange and will remain dangerously vulnerable.

See *Research Brief by The Geneva Association

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