Like other financial institutions, we've worked with the Bank of England on the Climate Biennial Exploratory Scenario (CBES).

Banks and insurers have provided projections to assess the impact that climate change will have on their businesses.

It has been a worthwhile and hugely informative exercise - we very much enjoyed taking part - but it makes for sobering reading.

Catherine Dixon, chief underwriting officer, Allianz Insurance

One of the conclusions of the report is that with floods and storms expected to cause more frequent and costly damage, insurance may become unaffordable or unavailable in some regions. That, however, is not inevitable. If all areas of business and society do their bit to reduce the impact of climate change, a worst-case scenario could be avoided.

At Allianz, we have had environmental goals embedded in our strategy for a while now, and just last month we accelerated our global climate plan. We'll be taking a stricter stance on oil and gas as we continue to pull out of coal, and we'll target net-zero operations by 2030 instead of 2050.

The CBES confirms that insurers need to intensify their efforts to build their own resilience, reduce their impact on the planet and be there for their clients as they also transition their ways of living and working.

Allianz operations in the UK have been carbon neutral since 2012, and our offices are powered 100% by renewable energy. When we move sites, we opt for sustainable buildings and we recycle our office furniture and equipment. We donate surplus food from our Guildford headquarters' canteen to a local charity. For motor claims, we support the use of green parts and for property claims, we encourage repairs rather than replacement. We've also changed our tagging method for inspections to cut plastic waste.

We want to influence our partners to protect the climate as well. So we've launched a sustainable procurement charter to prioritise suppliers who have strong environmental standards and we've set up the Allianz Net Zero Accelerator to support independent brokers in measuring, reducing and offsetting their carbon footprints.

Finally, at a customer level, we want to empower people and businesses to transition to net zero. Concretely, that means providing cover for electric vehicles, renewable infrastructure and other green projects. Plus, we are constantly looking at new products we may offer to enable a wider shift to a more sustainable economy.

As a business, we're rising to the challenge and we've been joining forces with others in the industry to preserve our environment. What the CBES shows, however, is that insurers are up against powerful forces and we cannot do this alone.

Flooding is among the perils that pose the largest physical risks in the UK, along with storms. Over the next 60 years, if no action is taken to mitigate climate change, annual losses from inland flooding could double and those from coastal flooding could grow tenfold.

Extreme weather events cause claims surges, which pose organisational challenges as insurers and loss adjusters need to handle large volumes at once. Storm Eunice in February showed how the industry leveraged geospatial data and mobilised surge teams to deliver the level of service our customers deserve. However, in a future suffering more frequent and extreme weather events, to guarantee stable levels of service, products might need to evolve toward parametric payments.

If future natural catastrophes cause increased global losses, this puts into question the availability of reinsurance. Without sufficient protection, insurers would need to drastically re-think their exposure; the impact on affordability and availability of insurance would be significant. Working to reduce flood risk now is therefore vital.

Under the 'Build Back Better' scheme initiated by Flood Re, some homeowners who've suffered a flood can claim up to GBP10,000 to repair their property so that it is more resilient (special doors, waterproof flooring, higher sockets).

Longer term measures could also make a difference. The government is investing GBP5.2bn in flood and coastal defences over six years (2021-2027) and these will need to be maintained. It is important that government investment in flood defences continues.

Finally, planning regulations should be reformed so as to avoid floodplain developments.

The climate scenario exercise clearly spells out the impact of inaction. At Allianz, we're more determined than ever to do everything we can for the planet.

(C) 2022 Electronic News Publishing, source ENP Newswire