This isn’t a tale of the future. this is a story unfolding almost everywhere today in some shape or form.
Insurance is a mechanism for pricing and spreading risk. It can be instrumental in underwriting a future that is more resilient. But when there isn’t a flow of investment into adaptation at scale to make things safer, the default strategy is to retreat – leaving people, communities and businesses stranded.
And when insurance goes, banking follows shortly after.
And as the most vulnerable areas become uninsurable it makes investment in resilience all the more difficult.
Ironically, much of the insurance industry recognises the existential threat to its own existence to an increasingly shrinking insurable world – but their huge investment portfolios are still stuck in strategies completely disconnected from the resilience we require – often supporting the things which make matters far worse. And underwriting policies seldom tilt towards a stable future, instead still propping up activities that make life more fragile for us all.
It doesn’t need to be this way. Insurance has been a good example of collaborative innovation – helping society to spread risks. But now that we’re facing a challenge that cannot be solved by spreading risk alone, we need a new collaborative solution. A new conversation between insurance and society. But also with banks and investors who will increasingly be reliant on insurance turning a corner in order to have any chance of plotting a course for a resilient transition.
An abandoned society – uninsured and de-banked – doesn’t benefit anyone.
We might have historically thought of insurance as boring. It’s definitely more interesting now.
See the full video by Climate Majority Project
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PS: If you’re writing a transition plan, or have one on the horizon, download our free guide to the Transition Elephant in the room – or come along to one of our Workshops.