As part of the Liberty Mutual Climate Transition Center’s ongoing focus to convene cross-industry conversations around the climate transition, the Center hosted the insurance industry think tank Geneva Association’s annual Climate Change & Environment Conference in Boston on October 16, 2024. The all-day event brought together industry leaders and experts from across the public-private-academic sectors to discuss the critical role insurance could play in the climate transition, including: advocating for more climate resiliency measures in the face of increased of physical climate risk; addressing the financing needs to accelerate the adoption of new, emerging or decarbonization technology; and better understanding the consumer behavior gap in transition journeys.
To kick-off the event, Liberty Mutual President & CEO Tim Sweeney had a high-level conversation with Geneva Association Managing Director Jad Ariss on the view of the industry’s role in the climate transition from a c-suite office. The two leaders discussed how more industry-wide collaboration is needed to support communities and businesses in mitigating climate risks through increased engagement with local stakeholders, better management of risks associated with new technologies, more knowledge sharing with policymakers and other decision-makers, and strengthening workforce development.
It was a natural segue into the first panel “Boosting the Insurability of Physical Climate Risk: An all-of-society endeavour,” which focused on the importance of implementing robust climate risk reduction measures to ensure the continued insurability of high-risk areas. Moderated by MunichRE’s Ernst Rauch, the panelists featured Dave Burt of Delta Terra Capital, Vermont Insurance Commissioner Kevin Gaffney and Carla Smith of Intact. The panelists emphasized the necessity of public-private partnerships and advanced tools for long-term climate risk assessment to support informed decision-making amid escalating climate threats because of the shifting regulatory discussions.
The second panel “Changing the Financing Narrative: How can insurance enable the energy transition?” explored the finance gap and crucial role of insurance in facilitating the energy transition. BloombergNEF’s Tom Rowlands-Ress opened the panel by sharing research findings on the global energy sector, before joining John C. S. Anderson of Manulife, Liz Geary of Liberty Mutual and Sonja Gibbs of Institute of International Finance in a discussion on the different roles that parts of the financial services sector plays in funding the transition, moderated by Geneva Association’s Maryam Golnaraghi. The panelists emphasized that achieving global climate goals will require new and decarbonization technologies and highlight ways that insurers can assist in the commercial deployment at scale. One example discussed was by reducing the risk premiums associated with emerging technologies, companies can improve risk-adjusted returns and attract more investors.
This was followed by the afternoon event’s keynote speech by Vanessa Z. Chan, former Chief Commercialization Officer at the U.S. Department of Energy, on the importance of cross-sector collaboration in technological innovation. By de-risking these new technologies, insurers can enable investors to overcome the risks associated with financing ‘first-of-a-kind’ pilots and fund these technologies without substantial capital losses.
The final panel of the day “The Household Transition: How consumer behaviour can move the needle on climate change” featured Greg Guthridge of Ernst & Young, Eric Johnson of the Columbia Business School and Jeff McAulay of Energetic Captial, moderated by Liberty Mutual’s Rakhi Kumar. The panel looked specifically at the complexity of consumer behavior which, along with policy and technology, is identified as a key macro-factor impacting the energy transition. Panelists discussed the growing importance of individual and household-level changes in supporting broader climate objectives and examined how insurers can support consumers decision-making through more risk information and sustainable options. They agreed that comprehensive public policies, coupled with private sector initiatives, must help make sustainable options more straightforward to increase adoption.
For more information on the Climate Change & Environment conference, check out Geneva Association’s event summary here.
