“Since when do insurers worry about changing climate?” you might ask.  If so, you should ask RSA Insurance Group plc, a leading insurance company headquartered in the UK. RSA in Canada focuses especially on marine insurance, but the concept they are demonstrating is will have significant effects across the whole insurance field, even for non-medical life insurance.
Just recently, RSA begun an official partnership with the World Wildlife Fund world-wide.  The synergy is a perfect win-win situation; it qualifies as both a good thing as well as a business goal.

If anyone can actually monetize a change in climate, it must be insurers.  However, even the insurers are sometimes unable to foretell what lies ahead correctly enough.  In the wake of the floods and droughts around the globe, plenty of insurance houses recorded large claims and thus had to pay considerable compensations on those of their insurance products that are linked with changes of temperature, weather, and climate.  This was a sign that they were unable to assess their products’ riskiness correctly.  And since risk is the primary concept underlying profession, it was necessary to work towards a change.

Therefore, this experience and the fact that RSA is so strongly involved with marine insurance were what prompted RSA to seek information, guidance and help at WWF.  They are interested in the transformations happening in the overall environment that WWF examines so carefully.  WWF administers various analyses in order to adequately care for animals in their natural habitat whose life depends on small variations in the climate.  Through helping WWF to do what they do best, RSA expects to benefit from finer forecasts.  This will in turn permit the insurer to ascertain better the risk it is facing, price its products more adequately, and stay away from too many expenses.

Given that the enhanced estimates will most probably be available publicly (including all other insurers), the influence of the data on competition between insurance companies is going to be unimportant.  Most likely, smoother competition will press down policy prices for insurees (as long as the forecasts don’t prove enormously disastrous).  The good: wild species will enjoy the RSA - WWF partnership regardless of the other variables.

A number of corporations are becoming conscious of the fact that an eco-conscious business model will not only save them substantial amounts of money, but also appeal to customers along with the general public in one fell swoop.  This mindset shift can already be recognized around well-known enterprises such as Sony Corporation, which uses only recycled paper, PricewaterhouseCoopers, also inclined towards a wide-scale shift towards greener offices, and, last but not least Adobe being recognized multiple times for building and inhabiting small-footprint office buildings.
 


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