Insurance in a Nutshell

When Hurricanes destroy… What connects Climate Change and Insurance

by Felicitas Obermeyer - September 19th, 2017

Within just a few days, two extremely destructive storms hit North America. From a geographical point of view, the Allianz headquarter in Munich seems to be far away from this tragedy, but in fact, it is not.

The storms Harvey and Irma had caused immense damage, especially in the US-states Texas and Florida for both the private households and the big economy located around. For the latter one, it’s especially Allianz Global Corporate & Specialty (AGCS), Allianz’s global industrial insurer, dealing with the consequences .

Since Harvey and Irma hit the coast, Allianz’ experts  are trying to estimate the damage caused by the hurricanes, facing the big problem that the true extent of the destruction is still unknown:

Most affected companies currently only know that their land or buildings are submerged, but not even their own employees have access to the company for security reasons.


Steve Kennedy (Regional Head of Property, Energy and Engineering Claims for North America)

 

It will take weeks to get an idea of the actual damage and even longer for the companies to register and report the long-term losses caused  by business or supply chain interruption.

Allianz is there to help, as Joerg Ahrens (Global Head of Key Case Management, AGCS) emphasizes:

 We actively support and advise our customers before, during and after the storm to limit the damage and to help them return to normal operation as quickly as possible. We will also make every effort to provide quick coverage commitments and issue first advance payments wherever possible.

But Allianz does not only take action afterwards

The Insurance Industry invests into climate change research, as it is directly affected by the consequences of the changing climate.

Especially developing countries are suffering from climate change impacts such as drought, flooding and other extreme weather events. But, as the last weeks have shown very clearly, also well developed countries will need to better anticipate the upcoming risks. The insurance industry as professional risk manager can play an important role in supporting the assessment and reduction of these risks, as well as the transfer of these risks to capital markets via insurance solutions.

It is our duty as a company to engage with academics, policy makers and civil society to improve our understanding of climate risks in order to provide solutions.

Amer Ahmed, CEO Allianz Reinsurance

 

Within Allianz there are special departments dealing with climate change, such as  Allianz Climate Solutions or Allianz Re Cat Research and Development. They provide forecasts, calculate risks and develop strategies in climate and energy related issues.

As an insurer and long-term investor, social and environmental responsibility is fundamental to Allianz day-to-day business because it’s commitment to deliver on the promises for the customers not only today but also in the long-term.

To understand changing risks, it is key for us to advance research on climate change.

Markus Stowasser, Head of Cat R&D Allianz Reinsurance

As part of its activities to mitigate risks related to climate change, to increase resilience, and to promote scientific research, Allianz brought the Climate Risk Research Award into being.  The Award is intended to support talented researchers whose research focuses on reducing the risk of extreme weather events that are intensified by climate change or fostering resilience by applying technological solutions.

So although at first Munich appeared to be far away from the direct impacts of climate change, Allianz is deeply engaged in problem solving and trying to be close to the affected people and companies.

 

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