Hong Kong’s Insurance Authority (IA) recently hosted a panel discussion on how the insurance industry can manage and mitigate climate-related risks.
The session, titled “Innovating Insurance to Combat Climate Change,” was held at the Asian Financial Forum (AFF) and provided a platform for insurance professionals to share the industry’s participation in initiatives for addressing climate change, as well as discuss some emerging opportunities in the near future.
The panel, composed of senior executives from two insurers, a reinsurer, and an insurance broker company, discussed the implications of local and global climate-related initiatives on the insurance industry, including the “Common Ground Taxonomy” which provides reference for identifying environmentally sustainable activities, and growing needs for climate-related risk management, from the perspectives of a risk underwriter and an impact investor.
The panellists also talked about challenges they encountered, such as climate-related data needs and gaps, and shared their insights on other areas of potential opportunities, such as the development of index-based or parametric products and solutions for mitigating climate-related risks.
“Hong Kong endeavours to play its part in combating climate change and consolidate its status as a regional green and sustainable finance hub,” said Tony Chan, associate director, policy and development at the IA. “The IA has been actively participating in the green and sustainable finance cross-agency steering group to steer initiatives, and encouraging the industry to contribute to the cause in a multi-pronged approach through public advocacy, corporate disclosure, risk modelling, differential underwriting, product innovation and impact investment.”
Chen also said that, as part of the IA’s effort to consolidate Hong Kong’s status as a global risk management centre, the organization “will continue to nurture a vibrant ecosystem for green insurance with a view to enabling the insurance industry to develop while delivering its social value.”
