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What 'Acts of God' Can Teach Us About the Changing Role of Insurance From QFINANCE: The Ultimate Resource 4th Edition, Published September 2013 David Bresch has headed the sustainability unit at Swiss Re since 2008. Swiss Re is a leading wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. There is a tremendous body of evidence pointing to climate change being both a fact and manmade. Even if all emissions could be stopped today, the climate will continue to alter in the coming decades. We need to reduce emissions as quickly as possible by making our societies more resilient. Take a house on the edge of a crumbling cliff, for example. That is not an insurable proposition as it stands, but a serious consideration would want to look at whether the cliff top could be stabilized, or the cliff supported, perhaps for other reasons such as coastal defence that would justify the cost. There are large numbers of cities and regions that would be in a better position of they could get some of the risk volatility out of their balance sheets, with much of that volatility coming from the stresses that follow 'acts of God,' for example, the Caribbean Catastrophe Risk Insurance Facility. The CCRIF is a risk-pooling facility owned, operated and registered in the Caribbean for Caribbean governments. It Is the world's first and, to date, only regional fund utilizing parametric insurance, thus giving Caribbean governments the opportunity to purchase earthquake and hurricane catastrophe insurance with the lowest-possible pricing. Even if the world does move into a more volatile phase, it will still be possible to model potential events and plan for them in a coherent fashion, with the scale of the payout precisely calibrated to the intensity of the disaster. The challenge for some of these societies, particularly low-lying islands, is that if catastrophes happen too often, the people become desperate and lose trust; the social fabric starts to unravel, so these matters must be addressed urgently. As a single actor we can by no means provide resilience single-handedly; but we do play a role in helping communities to strengthen their resilience. For further information, or to contact the author about a longer piece or viewpoint, please do not hesitate to get in touch with Tel: 020 7631 5831 About David Bresch and Swiss Re David Bresch's previous roles at Swiss Re include head of university and risk research relations, head of atmospheric perils group, and chief modeller for natural catastrophe risk assessment. He is a member of the adaptation board of the global network for climate solutions of the Earth Institute at Columbia University. More information at and About QFINANCE QFINANCE is a unique collaboration of more than 300 of the world’s leading practitioners and visionaries in finance and financial management, providing an unparalleled range of crossreferenced resources, which are sure to satisfy the hungriest of minds.

What Acts of God can teach us about insurance  

Swiss Re's David Bresch talks about climate change and insurance in this abridged article from QFINANCE (