Stay current on changes and developments in corporate law with a wide variety of resources and tools.
Oct. 20 — Chubb Group, MetLife Group and other property and life insurers are getting better at overseeing risks posed by the effect of climate change on their clients and investments even as its impacts get worse.
Some of their biggest gains in recent years have come in the governance of climate issues at the board and executive level, according to a Ceres review of disclosures to state regulators. Those gains were not shared by health insurance companies, which Ceres says remain largely unprepared to address climate risks.
The last time the nonprofit looked at companies’ responses to a survey by the National Association of Insurance Commissioners (NAIC), it found “a profound lack of preparedness” for a changing climate. Most insurers still landed in the bottom half of Ceres’ latest ratings, released Oct. 20.
But the number of top performers has more than doubled, from nine in 2012 to 22 in 2014, with insurers writing more than $5 billion in direct premiums showing the most marked improvement.
“They're not unprepared” anymore, Ceres' Max Messervy, lead author of the report, told Bloomberg BNA. Still, he said there's room for even more improvement, especially among health insurers. None of the health insurers evaluated earned a high-quality rating on governance or for their disclosures overall.
How well insurance companies governed climate risks was associated with higher quality climate disclosure, the report found.
One of the top scorers was property and casualty insurer Hartford Financial Services Group, which has a separate environment committee that reports to its board. “As a 200-year-old company, we understand that to keep going and to have kept going for two centuries, we have to manage not just our climate-change risks but also be good stewards” in other areas as well, Jay Bruns, who leads environmental stewardship at the Hartford, told Bloomberg BNA in an interview.
Mary O'Malley, vice president of corporate governance at Prudential Financial, said she regularly updates a board committee on “strategic issues like carbon risks in investment portfolios.” Sustainability issues are also factored into the life insurer's director-nomination process and real estate investments, she said.
Prudential was one of nine life and annuity insurers that received high marks for considering climate risks in their investment portfolios, up from only two before.
Ceres' report comes against a backdrop of more extreme weather events. As of September, the U.S. has seen 12 weather and climate disasters with losses exceeding $1 billion each, well above the 1980 to 2015 average of about five events per year, according to the National Oceanic and Atmospheric Administration.
To contact the reporter on this story: Andrea Vittorio in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
The Ceres report is available at https://www.ceres.org/press/press-releases/insurer-climate-risk-disclosure-release.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)