Support climate awareness amongst our customers

3.1 Inform customers of climate risk and provide tools

See the response 3.2 below

3.2 Encourage customers to adapt to climate change and reduce emissions through insurance products and services

QBE is a market leading provider of general insurance and reinsurance to the commercial sector including carbon intensive industries such as Property, Marine & Energy, Aviation and Manufacturing, and organisations which operate motor vehicle fleets. QBE is well placed to monitor emerging trends and service the changing needs of our customer base in any transition to alternative energy technology, products and services.

The prevalence of energy-intensive sectors such as property, manufacturing, marine and aviation among our client base could potentially expose us to a future decline in demand for carbon-intensive products and services. Our market-leading position, however, means we are well placed to monitor emerging trends and provide support in to new and emerging energy technology products and services e.g. wind, wave motion and solar power generation.. We also perceive opportunity in growing risk-awareness in a future in which climate change encourages a greater incidence of insurable events.

The potential impacts of climate change may also create opportunities for the Group. QBE’s significant presence and expertise in the global commercial insurance and reinsurance market, particularly the Marine and Energy sectors, will create a platform to provide insurance support for emerging alternative energy technologies, products and services.

Product line specific assessment/information:

  • Aviation - Understand that there is currently Class Action in California, under Article 65 relating to airlines negligently polluting the air. This does not impact our Aviation syndicate as the action pre-dates the inception/commencement of the aviation division.  QBE would not take any risk in providing pollution cover due to its long tail and potential scope.
  • Asset Protection – Potential threats are being monitored in particular relating to possible increased residual value depreciation of ‘environmentally unfriendly’ assets and the resultant insurance losses. The Cambridge Institute has been appointed to monitor the situation and advise the team. There are some opportunities in respect of maintained availability insurance for renewable energy (i.e. focus on generation risk rather than credit risk).
  • Property - No opportunity currently identified, however, due to the changing weather patterns and increased risk; QBE will:
    • Embed risk assessment using weather related models, such as Risk Management System Catastrophe Modelling;
    • Develop more sophisticated UK flood underwriting tools for UK Property i.e. break down risk by inland, coastal and surface water flooding; and,
    • Continue participation on the ABI Property Committee (see 2.1 above).

It should be noted that underwriters already utilise results from aggregate modelling using information provided by the Government containing up-to-date flood and subsidence exposure. Additionally, a new geographical risk evaluation tool is being developed.

  • Motor – No additional risk or opportunity from the effect of climate change;
  • Credit & Bonds – No current threats identified for this area of the business as yet.  Originally there was an expectation that the carbon trading market could be quite large. However, there has been an almost insignificant level of business. It is now believed that it will take 2 – 3 yrs before tradable (carbon credits) will require significant level of credit insurance. However, Munich Re has been identified as a partner when the time is right;
  • Casualty – there has been an increase in the number of requests for cover relating to firms engaged in carbon capture or development of renewable energy. Underwriters have always been aware of the exposure from any financial liability extension; and,
  • Marine & Energy – Reviewing the possibility of specific moves into renewable energy insurance, however results of the research conducted were not favourable to the current renewable energy insurance market.

Further information is available regarding the initiatives of QBE Australia / Americas and Asia Pacific, if required.

3.3 Increase sustainable repairs and manage waste material

No information available at this time.

3.4 Consider how to use expertise to help developing world

See response to 3.2 – QBE has developed ‘Realistic Disaster Scenarios’ for situations such as extreme weather predictions, this allows us to maintain a commercial presence in countries and regions, including developing countries that may be at heightened risk from the impacts of climate change.

QBE Group’s involvement in the community is encouraged and is structured along divisional lines with initiatives being generated from the ground up. A common element is that QBE’s community and social involvement is based around local initiatives about which employees are highly engaged and passionate. As well as donations by the Group and the divisions to numerous local charitable and other community organisations, QBE employees also make contributions through payroll deductions and giving of their time to local community volunteer projects.

The QBE teams around the world have identified various nominated charities including Mission Australia, Create Foundation, and the Lloyd’s community programme in the UK; and, in the Americas, QBE staff engaged with a number of organisations across multiple states with a focus on three main areas including disaster prevention.

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