Climate risk: don’t rush decisions, take the gradual approach
A carefully considered approach to climate change is essential, regulators discussed yesterday.
Lori Wing-Heier, a member of the Sustainable Insurance Forum, told the Bermuda Risk Summit that while there is a need for immediate action, rushed decisions could have an adverse effect.
“On climate risk right now, we can’t go fast enough, but we also run the risk of going too fast,” said Wing-Heier, the director of the Alaska Division of Insurance and a representative of the National Association of Insurance Commissioners (NAIC).
“Whatever we do, we don’t want to make the world worse off than it is right now.”
“New technology must be properly tested to ensure it’s not going to put further harm into the environment,” she said.
“California is going from drought to more snow and rain than they’ve had for the last 20 years. There’s a lot we can watch. I don’t think we can just look at the development of certain minerals. There needs to be a transition period and we need to address that.”
Wing-Heier was speaking during a 45-minute panel discussion titled “Navigating Complex Risks: A Regulatory Perspective”, moderated by Suzanne Williams Charles, the director of policy and regulation at the Association of Bermuda Insurers and Reinsurers.
Another panellist, Chlora Lindley-Myers, president of the NAIC and director of the Missouri Department of Commerce and Insurance, noted tornados had become more frequent.
“As far as Missouri is concerned, we are looking at climate change and at the state of the market,” she said.
Climate change must be approached as a gradual process, she said.
“You can’t just say today you have fossil fuels, but tomorrow it can’t be. We have to discern where we want to be and where we want to go.
“Some states depend on fossil fuel a lot more than others, then there are others that came into the game a lot earlier. We need, with a moderate approach, to look at where we are, where we need to go.”
Gerald Gakundi, director of supervision (insurance) at the Bermuda Monetary Authority, also spoke about the importance of human capital in handling global issues.
“If we are to tackle the issues that face not just Bermuda but the world. We need the right level of human capital, the right level of innovation, and to be able to deal with the complexity of the hard market,” Gakundi said.
This requires focusing on training and ensuring that organisations have the right processes that allow people to be innovative, he said.
Andrew Dyer, head of London markets at the Bank of England, gave an update on the diversity, equity and inclusion (DE&I) progress.
Leadership are reviewing feedback to a discussion paper on DEI, he said, and a consultation paper and proposals are being drawn up.
“It contributes to better management and better decision-making,” Dyer said. “The battle now is about effective implementation.”
