QBE Insurance Group has been urged to become transparent about the potential risks it faces from climate change, in a shareholder resolution co-filed by environmental finance group Market Forces and $10bn-industry super fund Local Government Super (LGS).
“Climate change-related risks present very significant investment issues for the insurance industry, and these have been felt by QBE in recent years,” said Bill Hartnett, head of sustainability at LGS, an advocate of the TCFD framework for the disclosure for climate risk. “We encourage QBE, along with other companies, to use the framework to align their disclosures with the needs of investors.”
“Major Australian shareholders are no longer willing to sit back while companies fail to manage climate change,” said Daniel Gocher, a Market Forces analyst. “Climate change is increasing the frequency and severity of storms, fires and floods. In 2017, QBE’s cost of natural disasters tripled compared to the year prior. This presents a complex risk management challenge for the company, with material ramifications for shareholders.”
New QBE CEO Pat Regan said that in 2017, the insurer faced an “unprecedented” series of claims from natural disasters, costing the company US$1.227bn, up from the US$439m the year before.
According to global reinsurer Munich Re, 2017 was “the second costliest year in insurance history,” with losses from natural disasters – including the North Atlantic hurricane season, California wildfires, and Tropical Cyclone Debbie in Queensland and NSW – amounting to US$330bn.
Market Forces said QBE had so far made “substandard” disclosure on its climate risks and failed to make a clear commitment to report against the TCFD recommendations.
