Prince of Wales: Insurers must rise to climate change challenge

·3-min read

The Prince of Wales has urged the world’s insurers to rise to the “challenge” of tackling climate change and “innovate new products”.

Charles said a “seismic shift of investment” was needed if nations were to realise the aspiration of creating a “low carbon world” by the middle of the century.

His comments were made from Lloyd’s of London – the premiere insurance market – as he launched his Sustainable Markets Initiative (SMI) Insurance Task Force to help lead the industry towards greener goals.

The heir to the throne told a group of underwriters and brokers gathered in Lloyd’s iconic underwriting room: “My sincere hope is that the industry will rise to these challenges and regard them as opportunities, and that it will avoid the temptation to restrict coverage but, rather, innovate new products.

Charles visits Lloyd’s of London
The Prince of Wales addressed a socially distanced audience (Kirsty O’Connor/PA)

“It we are to realise the aspirations of moving to a low carbon world by the middle of this century, there will have to be a seismic shift of investment into new industries and sectors.

“This transition in favour of nature, people and planet can also represent the biggest opportunity for the insurance industry in recent times.”

He went on to say: “If there is one insurance policy we need, it’s the one that guarantees the survival of the natural systems that sustain all life on Earth – and us.”

Earlier he joined a meeting of the Insurance Task Force which featured the chief executives from a range of leading insurance and financial services companies including Allianz, AXA, Direct Line Group, Legal & General and Lloyd’s.

Charles visits Lloyd’s of London
People listen to the Prince of Wales from staircases (Kirsty O’Connor/PA)

The new body has a number of initiatives to drive climate positive action including the introduction of “build back better” claims clauses in home insurance policies to encourage customers to rebuild damaged properties with more sustainable materials.

The Task Force is also planning to launch at least two new insurance products to protect priority industries, like nuclear energy, hydrogen and offshore wind, against a potentially risky landscape to help accelerate their growth.

When Charles first arrived in the Lloyd’s underwriting room – a dramatic atrium open to the roof – he quipped: “Looks like something out of James Bond”.

The Lutine Bell was rung loudly twice – a traditional signal of good news dating back to the 19th century – while a single ring marks a bad event like the loss of shipping at sea.

Charles visits Lloyd’s of London
The Lutine bell is rung as the Prince of Wales enters the underwriting room (Kirsty O’Connor/PA)

Lloyd’s chairman Bruce Carnegie-Brown also gave a speech and spoke about his industry’s commitment to helping clients move towards a more sustainable future.

He said: “The critical journey to a successful transition to a low carbon economy will require global collaboration on a vast scale.

“Alongside the commitments that many nations around the world are making to take action to de-carbonise, Lloyd’s and the global insurance industry have an important role to play in supporting that transition.

“Given our expertise in risk mitigation and management, disaster resilience and recovery – and we’ve more than 6 trillion dollars in assets under management – the global insurance industry is in a unique position to provide innovative products and services to finance, manage and protect against the rapidly changing risk landscape that our customers face as they transition to a more sustainable future.”