INDEPENDENT PUBLICATION BY RACONTEUR.NET #0647 27/02/2020 FUTURE OF INSURANCE MEETING CLIMATE GROWING PROTECTION UNCERTAIN ROAD FOR 03 CHANGE HEAD ON 04 GAP FOR GIG WORKERS 13 DRIVERLESS CARS 19673_ADVT_264x50mm banner for Raconteur_Future of Insurance_FINAL2.indd 1 06/02/20 12:56:57 RACONTEUR.NET 03 FUTURE OF ENVIRONMENT INSURANCE Insurers have to meet Distributed in climate change head on Published in association with Insurance against climate change is fast becoming non-negotiable for both individuals and businesses Olivia Gagan risk of water entering your facility. Contributors Greater resilience opens up more limate-change risk to the options, like parametric insur- Anthony Beachley Josie Cox C insurance sector has never ance, which uses sensors to detect Former BBC World Service Business reporter, been greater. Weather water exceeding a particular depth journalist specialising in commentator and anomalies are now commonplace: in buildings and can result in an David Gray/Getty Images Gray/Getty David finance and tech, his work broadcaster, she worked at the past year alone saw unprece- instant payout. Anything below has been published in the Reuters and The Wall Street Spectator, Economist and Journal, and was business dented wildfires in California and that [is covered by the fact that] The Independent. editor of The Independent. Australia, exceptional flooding in you’ve built flood resilience into Venice and the costliest typhoon on your building,” she says. record in Japan. Parametric insurance makes sense Marianne Curphey Cath Everett 2017-18 was the most expen- if businesses have prepared them- Award-winning financial Journalist specialising writer, blogger and in workplace, leadership sive two-year period on record for selves by taking action to install columnist, she has held and organisational global re-insurance, which had resistance and recoverability meas- positions at The Guardian culture, she also writes to stump up $219 billion to set- ures, Adams adds. Each property is and The Times, and about the impact of tle claims for weather-related different, but a business that could writes for a variety technology on business damages, according to a World more easily qualify for paramet- of publications. and society. Economic Forum report. ric insurance would be one which Olivia Gagan Oliver Pickup That’s just for those who can get can tell their insurer: “I've moved Journalist writing about Award-winning journalist, insurance. Antony Woodhouse, my electrical sockets up. I've put energy, sustainability he specialises in partner at law firm DWF, says: “One in water-resilient plasterboard. and culture for titles technology, business and of the biggest issues is whether I've tanked out my floor. I put some including The Times, sport, and contributes to a The New York Times and wide range of publications. insurance companies can carry on pumps in. I’ve moved my product Time Out London. offering insurance that responds to Dr Bev Adams, head of catastro- aren’t compensated for a specific on to crates. I’ve moved my key climate change-related risks. The phe resilience at insurance broker loss, like a collapsed factory wall machinery up.” more frequent the natural disas- and risk manager Marsh, says that or a waterlogged sofa, but for the Insurers like parametrics because ters, the more difficult it can be to in the UK and beyond, the indus- triggering event, like a flood or a they know in advance what the set- find insurers with an appetite to try’s approach to climate change drought. A pre-agreed sum of cash tlement will be and the exact con- provide cover. and flood is evolving. As risk is paid out when floodwater reaches ditions that will lead to a payout. “There's also the issue of insur- heightens, the payouts grow and a certain level, for example, or tem- It’s a model that could work well for ers adjusting their prices to reflect the gap between climate risk and peratures or wind speeds hit a people and businesses in high-risk the increase in risk of freak events. protection gets bigger, so the sector predetermined high. areas which fail to qualify for tradi- Premiums would necessarily rise is starting to focus on recoverabil- Adams says we should increas- tional insurance. and become unaffordable to some ity, as well as prevention. ingly expect preventative meas- Such cover relies on data and people, which could then become a Cue the rise of a different type ures to be built into homes and measuring tools. UK parametric social and political issue.” of cover against climate change: businesses. “Traditional insurance insurer FloodFlash calculates its As a result, governments and regu- parametric insurance. Policyholders protects you financially against the premiums according to the flood lators are increasingly asking insur- risk it believes an individual or Publishing manager Head of production James Studdert- Justyna O'Connell ers if they can handle the liabilities business faces. It calculates this climate change represents. Since using data such as historic rainfall Kennedy NATURAL CATASTROPHES AND INSURANCE Design last year, the Bank of England’s records and sensors which measure Associate editor Joanna Bird Prudential Regulation Authority the quality of terrain. Tamper-proof Peter Archer Sara Gelfgren Customers with medium has required insurers to stress test sensors developed by ex-Dyson Kellie Jerrard to high-risk exposure to Deputy editor Harry Lewis-Irlam their businesses against the risk natural catastrophes staffers are installed at the insured Francesca Cassidy Celina Lucey that the world fails to meet temper- location, triggering a payout when Colm McDermott ature and carbon reduction targets. water reaches a pre-agreed depth. Managing editor Samuele Motta Independent watchdog, the Asset Dr Bronwyn Claire, senior pro- Benjamin Chiou Jack Woolrich Owners Disclosure Project, has gramme manager of ClimateWise, a 69% 75% warned that the industry is failing University of Cambridge-backed net- Digital content executive Head of design to meet the objectives of the 2016 PERSONAL LINES COMMERCIAL LINES work of insurers seeking to reduce Taryn Brickner Tim Whitlock INSURANCE INSURANCE Paris Agreement. the impact of climate change on the So how is the industry adapt- sector, is focused on industry best ing? In the UK, flooding is per- practice to provide as much cover for Although this publication is funded through advertising and haps the biggest climate risk. UK natural disasters as possible. 13% 22% sponsorship, all editorial is without bias and sponsored features trade organisation Business in the “How do we make sure that as are clearly labelled. For an upcoming schedule, partnership Community estimates 40 per cent much is covered by insurance as pos- inquiries or feedback, please call +44 (0)20 3877 3800 or of businesses close for good after sible, so everyone can be more resil- email [email protected] a catastrophic loss from flood- ient and bounce back?” she asks. Raconteur is a leading publisher of special-interest content and ing, with small businesses los- Customers with As high-impact weather events are research. Its publications and articles cover a wide range of topics, ing 50 working days on average comprehensive coverage increasingly seen more as an expec- including business, finance, sustainability, healthcare, lifestyle and technology. Raconteur special reports are published exclusively in after a water breach. February tation than a risk, insurance against The Times and The Sunday Times as well as online at raconteur.net 2020 saw Storm Ciara and Storm Insurers who feel that the risks are climate change now seems to be The information contained in this publication has been obtained Dennis overpower homes and driving demand for new offerings about enabling recovery for as many from sources the Proprietors believe to be correct. However, high streets and batter infrastruc- people as possible. There is a sense no legal liability can be accepted for any errors. No part of this ture, just two months after then- of inevitability about the physical publication may be reproduced without the prior consent of the Personal Commercial environment secretary Theresa lines insurance lines insurance damage society must reckon to cope Publisher. © Raconteur Media 15% 26% Villiers promised an inquiry into with as a result of climate change. why many flood-prone communi- Claire concludes: “The goal now is to @raconteur /raconteur.net @raconteur_london ties are denied insurance. Capgemini 2019 recover quicker.” raconteur.net /future-insurance-2020 RACONTEUR.NET 03 FUTURE OF ENVIRONMENT INSURANCE Insurers have to meet Distributed in climate change head on Published in association with Insurance against climate change is fast becoming non-negotiable for both individuals and businesses Olivia Gagan risk of water entering your facility. Contributors Greater resilience opens up more limate-change risk to the options, like parametric insur- Anthony Beachley Josie Cox C insurance sector has never ance, which uses sensors to detect Former BBC World Service Business reporter, been greater. Weather water exceeding a particular depth journalist specialising in commentator and anomalies are now commonplace: in buildings and can result in an David Gray/Getty Images Gray/Getty David finance and tech, his work broadcaster, she worked at the past year alone saw unprece- instant payout. Anything below has been published in the Reuters and The Wall Street Spectator, Economist and Journal, and was business dented wildfires in