ABSTRACT
This chapter uses a desktop study to examine the insurance industry’s potential as a ‘fulcrum institution’ that can influence others to prevent and address environmental harms from climate change. As this chapter demonstrates, given insurance’s central economic role, the relationship between insurers and climate change is complicated and conflicted. After the discussion of insurers as shapers of climate risk (the first section of the chapter), this chapter explains how (in the second section) insurers are strongly implicated in creating climate change and attendant climate risk in the period since industrialisation through facilitating the accelerating fossil-fuel-based economic development and growth that causes climate change; this is the dominant dimension in insurers’ relationship with climate change. In the third section of this chapter, the authors review insurers’ responses over the past decade to increasing climate risk. Responses have been largely adaptive and aimed at increasing insurers’ capacity to accommodate the climate risks faced by their policyholders. Some responses have been ‘weakly mitigative’, meaning that they provide for some mitigation, but on a very limited scale, and largely as side effects of initiatives unrelated to climate change. In marked contrast, a very limited number of recent ‘divest and decline’ actions by insurance industry actors can be described as ‘strongly mitigative’, as described in the fourth section. The fifth section concludes the chapter with some remarks on the prospects for further strong mitigation action from insurers on climate change and their role as governors of security beyond the state.
