Global disaster bill revealed

AIR Worldwide has revealed that it estimates the insured loss from natural disasters in 2017 currently stands at US$250 billion, with global insured average annual loss pegged at US$80 billion.

The damage bill calculated by AIR annually has risen every year since 2012, with 2017 on par with record losses experienced in 2011 the firm said in its Global Modelled Catastrophe losses report.

“2017 offers a powerful reminder that the insurance industry and other stakeholders must never be complacent,” the report notes. “After a decade of below-average losses (apart from the aforementioned 2011), 2017 will surely remind not just newcomers to the industry, but even those who have spent their careers assessing and managing catastrophe risk, that preparing for large losses before they occur is critical to continued solvency and resilience.”

For businesses with an international footprint, AIR said it is vital to appreciate the impact of global disasters.

“Understanding—and owning—this risk requires knowing both the likelihood of high-loss years and the diversity of events that could produce such losses,” the report continues. “In addition, companies with global exposures and an expanding global reach should prepare for the possibility that future catastrophes will produce losses exceeding any historical amounts.”

In addition, AIR stressed that underinsurance remains a problem both in under-developed and developed nations.

Only 19% of the world’s total economic losses were estimated to be insured in 2017 with just 9% of Asia’s economic losses insured, 14% of Latin America’s, 37% of Oceania’s and 38% of North America’s.

“Through the years, Asia has remained the region with the largest proportion of uninsured risk due to relatively low insurance penetration and, in some cases, nascent insurance markets,” the report continues. “However, a substantial insurance gap exists in the United States as well, especially in the areas of flood and earthquake.”

While the protection gap is worrying for both the insurance industry and the wider community, the report notes that it can help spur product innovation within the industry while the public sector and governments are beginning to realise the importance of a proactive approach to disasters.

“Understanding the protection gap can help governments assess the risks to their citizens and critical infrastructure, and develop risk-informed emergency management, hazard mitigation, and public risk financing strategies to enhance global resilience and reduce the ultimate costs,” the report concluded.

Source: https://www.insurancebusinessmag.com/au/

Giant reinsurer liquidates entire stock portfolio to pay hurricane and earthquake costs

by Oliver Suess, Bloomberg 09 Nov 2017

For Hannover Re, the world’s third-biggest reinsurer, it’s time to take profits in the stock market.

The German company said on Wednesday that it sold its entire stock portfolio, worth about 953 million euros ($1.1 billion), to help pay for claims from hurricanes and earthquakes.

It was “time to realize the gains in our portfolio of listed equities,” chief financial officer Roland Vogel said on a call with reporters. Global stock markets have rallied for more than eight years, with many reaching records. This year, Germany’s benchmark DAX Index has advanced 17%, while the Standard and Poor’s 500 Index has added 16%.

The reinsurer booked a gain of 223.3 million euros in the third quarter on the sale of its stock portfolio, which it had built by adding large groups of shares in August 2015 and January 2016. The decision means Hannover Re will no longer need to set aside money to protect itself from the risk of a stock-market crash. It will instead use that money to grow the business in areas hit by recent disasters such as hurricanes in the Caribbean and earthquakes in Mexico, Vogel said.

The proceeds of the stock sell-off will also help Hannover Re to keep the total amount of money it distributes to shareholders unchanged, Vogel said. For 2016, the company paid out 3.50 euros a share plus a special dividend of 1.50 euros.

Hannover Re shares have gained about 6% this year, increasing the company’s market value to 13 billion euros.

Copyright Bloomberg 2017

2017 is set to be in top three hottest years, with record-breaking extreme weather

WMO report highlights impacts on human safety, well-being and environment

6 November 2017 (WMO) – It is very likely that 2017 will be one of the three hottest years on record, with many high-impact events including catastrophic hurricanes and floods, debilitating heatwaves and drought. Long-term indicators of climate change such as increasing carbon dioxide concentrations, sea level rise and ocean acidification continue unabated. Arctic sea ice coverage remains below average and previously stable Antarctic sea ice extent was at or near a record low.

The World Meteorological Organization’s provisional Statement on the State of the Climate says the average global temperature from January to September 2017 was approximately 1.1°C above the pre-industrial era. As a result of a powerful El Niño, 2016 is likely to remain the warmest year on record, with 2017 and 2015 being second and/or third. 2013-2017 is set to be the warmest five-year period on record.

The WMO statement – which covers January to September – was released on the opening day of the United Nations climate change conference in Bonn. It includes information submitted by a wide range of UN agencies on human, socio-economic and environmental impacts as part of a drive to provide a more comprehensive, UN-wide policy brief for decision makers on the interplay between weather, climate and water and the UN global goals.

“The past three years have all been in the top three years in terms of temperature records. This is part of a long term warming trend,” said WMO Secretary-General Petteri Taalas. “We have witnessed extraordinary weather, including temperatures topping 50 degrees Celsius in Asia, record-breaking hurricanes in rapid succession in the Caribbean and Atlantic reaching as far as Ireland, devastating monsoon flooding affecting many millions of people and a relentless drought in East Africa.

“Many of these events – and detailed scientific studies will determine exactly how many – bear the tell-tale sign of climate change caused by increased greenhouse gas concentrations from human activities,” he said.

Patricia Espinosa, Executive Secretary of UN Climate Change which is hosting the Bonn conference, said: “These findings underline the rising risks to people, economies and the very fabric of life on Earth if we fail to get on track with the aims and ambitions of the Paris Agreement”.

“There is unprecedented and very welcome momentum among governments, but also cities, states, territories, regions, business and civil society. Bonn 2017 needs to be the launch pad towards the next, higher level of ambition by all nations and all sectors of society as we look to de-risk the future and maximize the opportunities from a fresh, forward-looking and sustainable development path, “she added.

Extreme events affect the food security of millions of people, especially the most vulnerable. A review of the Food and Agriculture Organisation (FAO) found that, in developing countries, agriculture (crops, livestock, fisheries, aquaculture and forestry) accounted for 26% of all the damage and loss associated with medium to large-scale storms, floods and drought.

According to the World Health Organisation (WHO), the global health impacts of heatwaves depend not only on the overall warming trend, but on how heatwaves are distributed across where people live. Recent research shows that the overall risk of heat-related illness or death has climbed steadily since 1980, with around 30% of the world’s population now living in climatic conditions that deliver prolonged extreme heatwaves. Between 2000 and 2016, the number of vulnerable people exposed to heatwave events has increased by approximately 125 million.

In 2016, 23.5 million people were displaced during weather-related disasters. Consistent with previous years, the majority of these internal displacements were associated with floods or storms and occurred in the Asia-Pacific region. In Somalia, more than 760 000 internal displacements have been reported, according to the UN High Commissioner for Refugees and International Organisation for Migration (IOM)

The latest International Monetary Fund (IMF) World Economic Outlook indicates that adverse consequences are concentrated in countries with relatively hot climates and which are home to close to 60% of current global population.

Selected Highlights

Global temperatures in 2017

Global mean temperature for the period January to September 2017 was 0.47°±0.08°C warmer than the 1981-2010 average (estimated at 14.31°C). This represents an approximately 1.1°C increase in temperature since the pre-industrial period. Parts of southern Europe, including Italy, North Africa, parts of east and southern Africa and the Asian part of the Russian Federation were record warm and China was the equal warmest. The northwestern USA and western Canada were cooler than the 1981-2010 average.

Temperatures in 2016 and, to an extent, 2015, were boosted by an exceptionally strong El Niño. 2017 is set to be the warmest year on record without an El Niño influence. The five-year average 2013-2017 is provisionally 0.40°C warmer than the 1981-2010 average and approximately 1.03°C above the pre-industrial period and is likely to be the hottest on record.

The WMO statement is based on five independently maintained global temperature data sets. WMO now uses 1981-2010 instead of the previous 1961-1990 baseline as it is more representative of current climatic conditions and allows for more consistent reporting of information from satellite and reanalysis systems (some of which do not extend back to 1960) alongside more traditional data sets based on surface-observations. The change in the baselines has no influence on trend analysis.

Precipitation:

Southern South America (particularly in Argentina), western China, and parts of southeast Asia were wetter than average. January to September was the wettest on record for the contiguous United States. Rainfall was generally close to average in Brazil, and near to above average in northwest South America and Central America, easing droughts associated with the 2015-16 El Niño. The 2017 rainy season saw above-average rainfall over many parts of the Sahel, with flooding in some regions (especially in Niger).

All-India rainfall for the 2017 monsoon season (June to September) was 5% below average. However, above-average rainfall in the northeast, and adjacent countries led to significant flooding.

The Canadian Prairies, the Mediterranean region, Somalia, Mongolia, Gabon and southwestern South Africa all received lower rainfall than average. Italy had its driest January to September on record.

Ice and snow:

Arctic sea-ice extent was well below average throughout 2017 and was at record-low levels for the first four months of the year, according to the National Snow and Ice Data Center and the Copernicus Climate Change Service. The Arctic annual maximum extent in early March was among the five lowest in the 1979-2017 satellite record, and according to the NSIDC’s data was record low. The five lowest maximum extents have occurred since 2006.

A strong and persistent low pressure system over the central Arctic helped to inhibit ice loss during the summer months. The Arctic sea ice extent minimum in mid-September was 25- 31% below the 1981-2010 average, and among the eight smallest minimum extents on record. The ten smallest minimum extents have all occurred since 2007.

Antarctic sea ice extent was also well below average. The annual minimum extent in early March was record low, and the annual maximum extent in mid-October was at or near record low levels. Sea ice conditions in the Antarctic have been highly variable over the past several years with the record large sea ice extents occurring as recently as 2015.

Northern Hemisphere snow cover extent was 10.54 million square km, near the median value in the 1967-2017 satellite record.

The Greenland ice sheet saw an increase of more than 40 billion tons of ice due to above-average snowfall and a short melt season. Despite the gain in overall ice mass this year, it is only a small departure from the declining trend, with the Greenland ice sheet having lost approximately 3,600 billion tons of ice mass since 2002.

Sea level:

The global mean sea level (GMSL) is one of the best climate change indicators. Global mean sea level has been relatively stable in 2017 to date, similar to levels first reached in late 2015. This is because the temporary influence of the 2015-16 El Niño (during which GMSL peaked in early 2016 at around 10 millimeters above the 2004-2015 trend) continues to unwind and GMSL is reverting to values closer to the long-term trend. Preliminary data indicate that a rise in GMSL may have started to resume from July-August 2017 onwards.

Ocean Heat:

Global sea surface temperatures are on track to be among the three highest on record. Global ocean heat content in 2017 to date has been at or near record high levels. Elevated tropical sea surface temperatures which contribute to coral bleaching were not as widespread as during the 2015-16 El Niño. But some significant coral bleaching did still occur, including the Australia’s Great Barrier Reef. UNESCO reported in June that all but three of the 29 coral reefs with World Heritage listing had experienced temperatures consistent with bleaching at some point in the 2014-2017 period.

Ocean Acidification:

According to the Intergovernmental Oceanographic Commission of UNESCO the ocean absorbs up to 30% of the annual emissions of anthropogenic CO2 in the atmosphere, helping to alleviate the impacts of climate change on the planet. However, this comes at a steep ecological cost, as the absorbed CO2 changes acidity levels in the ocean. Since records at Aloha station (north of Hawaii) began in the late 1980s, seawater pH has progressively fallen, from values above 8.10 in the early 1980s to between 8.04 and 8.09 in the last five years.

Ocean acidification is directly influencing the health of coral reefs and the survival and calcification of several key organisms. These have cascading effects within the food web and impact aquaculture and coastal economies.

Greenhouse gases:

The rate of increase in CO2 from 2015 to 2016 was the highest on record, 3.3 parts per million/year, reaching 403.3 parts per million. Global average figures for 2017 will not be available until late 2018. Real-time data from a number of specific locations indicate that levels of CO2, methane and nitrous oxide continued to increase in 2017.

Extreme Events and Impacts

Tropical cyclones

The North Atlantic had a very active season. The Accumulated Cyclone Energy (ACE) index, a measure of the aggregate intensity and duration of cyclones, had its highest monthly value on record in September.

Three major and high-impact hurricanes occurred in the North Atlantic in rapid succession, with Harvey in August followed by Irma and Maria in September. Harvey made landfall in Texas as a category 4 system and remained near the coast for several days, producing extreme rainfall and flooding. Provisional seven-day rainfall totals reached as high as 1539 mm at a gauge near Nederland, Texas, the largest ever recorded for a single event in the mainland United States.

It was the first time two Category 4 hurricanes (Harvey and Irma) made landfall in the same year in the USA. Irma had winds of 300 km/h for 37 hours – the longest on the satellite record at that intensity and spent three consecutive days as a Category 5 hurricane, also the longest on record. Like Irma, Maria also reached category 5 intensity and caused major destruction on a number of Caribbean islands. In mid-October, Ophelia reached major hurricane (category 3) status more than 1 000 kilometers further northeast than any previous North Atlantic hurricane. It caused substantial damage in Ireland, whilst winds associated with its circulation contributed to severe wildfires in Portugal and northwest Spain.

The WMO Expert Team on Climate Impacts on Tropical Cyclones found that, whilst there is no clear evidence that climate change is making the occurrence of slow-moving, land-falling hurricanes such as Harvey more or less frequent, it is likely that human-induced climate change makes rainfall rates more intense, and that ongoing sea-level rise exacerbates storm surge impacts.

Flooding

Exceptionally heavy rain triggered a landslide in Freetown, Sierra Leone in August, killing more than 500 people. Freetown received 1459.2 mm of rain in two weeks, about four times higher than average. Heavy rainfall contributed to a landslide in Mocoa, southern Colombia, in April, with at least 273 deaths reported.

Many parts of the Indian subcontinent were affected by monsoonal flooding, despite overall seasonal rainfall being near average. The most serious flooding occurred in mid-August in eastern Nepal,

northern Bangladesh and nearby northern India. Mawsynram (India) received more than 1 400 mm from 9 to 12 August. Rangpur (Bangladesh) received a month’s worth of rain (360 mm) on 11-12 August. More than 1 200 deaths were reported in India, Bangladesh and Nepal, whilst more than 40 million people were displaced or otherwise affected. The World Health Organization indicated that in Bangladesh alone, more than 13 000 cases of waterborne diseases and respiratory infections were reported during three weeks in August, whilst extensive damage was reported to public health facilities in Nepal.

Flooding affected many parts of Peru in March, killing 75 people and making 70,000 homeless. The Food and Agriculture Organization reported that there were significant crop production losses, particularly maize. Flooding of this type typically affects Peru during the late phase of El Niño events. Whilst there was no Pacific-wide El Niño during 2017, sea surface temperatures near the Peruvian coast in March were 2°C or more above average and similar to El Niño values.

Major flooding occurred mid-year in parts of southern China, especially within the Yangtze River basin. Peak totals from 29 June to 2 July topped 250 mm. Fifty-six deaths were reported and economic losses were estimated at more than US$ 5 billion.

Heavy rain affected the western United States in January and February caused substantial flooding, numerous landslides and the evacuation of tens of thousands of people. It was the wettest winter on record for Nevada, and the second-wettest for California.

Drought

Parts of east Africa continued to be seriously affected by drought. Following well-below-average rainfall in 2016, the 2017 “long rains” season (March to May) was also dry in many parts of Somalia, the northern half of Kenya, and southeastern Ethiopia.

FAO reported that in Somalia, as of June 2017, more than half of the cropland was affected by drought, with herds reduced by 40-60% since December 2016. WFP estimates that the number of people on the brink of famine in Somalia has doubled to 800 000 since February 2017, with half the country needing assistance. WFP has confirmed that more than 11 million people are experiencing severe food insecurity in Somalia, Ethiopia and Kenya.

From November 2016 to mid-June 2017, more than 760 000 drought-related internal displacements in Somalia were recorded by the Protection and Return Monitoring Network (PRMN), a United Nations High Commissioner for Refugees (UNHCR) led project.

Kenya declared the 2017 drought a national disaster. Nairobi faced water shortages that compelled city authorities to ration water, whilst cereal prices rose and GDP figures were hit.

An above-average wet summer season eased drought conditions in southern Africa. But localized drought intensified in the Cape Province.

Heavy winter rains in early 2017 eased long-term drought conditions in California, but resulted in some flooding, and contributed to vegetation growth which may have influenced the severity of wildfires later in the year.

Many parts of the Mediterranean experienced dry conditions. The most severe drought was in Italy, hitting agricultural production and causing a 62% drop in olive oil production compared to 2016. Rainfall averaged over Italy for January-August 2017 was 36% below average. It was also Italy’s hottest January-August on record, with temperatures 1.31°C above the 1981-2010 average. Other dry areas included many parts of Spain and Portugal.

The Democratic People’s Republic of Korea was affected by below-average rains, impacting key staple crops such as paddy and maize. In the Republic of Korea, rainfall from January to June was 51% below average, the lowest since national records began in 1973.

Major heatwaves

An extreme heatwave affected parts of South America in January. In Chile, numerous locations had their highest temperature on record, including Santiago (37.4°C). In Argentina, the temperature reached 43.5°C on 27 January at Puerto Madryn, the highest ever recorded so far south (43°S) anywhere in the world.

Much of eastern Australia experienced extreme heat in January and February, peaking on 11-12 February when temperatures reached 47°C.

Exceptional heat affected parts of southwest Asia in late May. On 28 May, temperatures reached 54.0°C in Turbat, in the far west of Pakistan near the Iranian border, and also exceeded 50°C in Iran and Oman. A temperature of 53.7°C was recorded at Ahwaz, Iran on 29 June, and Bahrain experienced its hottest August on record.

The Chinese city of Shanghai and the Hong Kong Observatory reported new records of 40.9°C and 36.6 °C during summer.

In the Mediterranean, Cordoba in southern Spain experienced 46.9°C on 12 July and Granada 45.7°C on 13 July. An extensive heatwave in early August led to temperature records in northern and central Italy, Croatia and southern France.

California had its hottest summer on record and extreme heat affected other western states. This culminated in a major heatwave at the end of August and early September, which included a record high temperature (41.1°C) at San Francisco.

Wildfires

Extreme heat and drought contributed to many destructive wildfires.

Chile had the most significant forest fires in its history during the 2016-2017 summer, after exceptionally dry conditions during 2016 followed by extreme heat in December and January.

11 deaths were reported, and a total of 614 000 hectares of forest were burnt, easily the highest seasonal total on record and eight times the long-term average. There were also significant fires during the 2016-2017 Southern Hemisphere summer in various parts of eastern Australia and in the Christchurch region of New Zealand, whilst the southern South African town of Knysna was badly affected by fire in June.

It was a very active fire season in the Mediterranean. The worst single incident occurred in central Portugal in June, with 64 deaths. There were further major fire outbreaks in Portugal and northwestern Spain in mid-October, exacerbated by strong winds associated with Hurricane Ophelia.. Other significant fires affected countries including Croatia, Italy and France.

The area burned in the contiguous United States from January to 19 October was 46% above the 2007-2016 average. The area burned in the western provinces of Canada was about eight times the 2006-2015 seasonal average and contributed to heavy smoke pollution. A wet winter, which allowed the heavy growth of ground vegetation, followed by a dry and hot summer, provided ideal conditions for high-intensity fires in northern California in early October. At least 41 deaths were reported, the worst loss of life in a wildfire in the United States since 1918.

Other noteworthy events

Severe cold and snow affected parts of Argentina in July. After heavy snow had fallen the previous day, the temperature reached −25.4°C in Bariloche on 16 July, 4.3°C below the previous lowest temperature on record there. Other regions where record low temperatures occurred in 2017 included some locations in inland southeastern Australia in early July, where Canberra had its lowest temperature (−8.7°C) since 1971, and the Gulf region in the Middle East in early February.

The United States had its most active tornado season since 2011, with a preliminary total of 1 321 tornadoes in the January to August period, including the second-most active January on record.

The World Meteorological Organization is the United Nations System’s authoritative voice on Weather, Climate and Water

Website public.wmo.int

For further information contact: Clare Nullis, media officer. Email cnullis@wmo.int. Tel 41227308478 or Cell 41797091397

Notes for Editors:

WMO uses three conventional surface temperature data sets – NOAA’s NOAAGlobalTemp data set, Met Office Hadley Centre and Climatic Research Unit HadCRUT.4.6.0.0 data set and NASA GISS’s GISTEMP data set. They use measurements of air temperature over land and sea-water temperature measurements over oceans to estimate temperatures around the globe.

WMO also uses two reanalyses with a much wider range of input data, including measurements from satellites. The input data are combined using a weather forecasting system, which provides a globally complete, physically consistent estimate of surface temperatures for each day. They provide better coverage of regions, such as polar regions, where observations are historically sparse. The two reanalyses used in the statement are the ERA-Interim of the European Centre for Medium Weather Forecast and the JRA-55 of the Japan Meteorological Agency. Despite the very different approach, the estimates of global average temperature produced by these reanalyses are in good agreement with the conventional surface temperature datasets

The provisional statement now uses 1981-2010 as a baseline. This takes the place of the 1961-1990 baseline used in previous reports. The 1981-2010 period is recommended by WMO to compute the climatological standard normal for climate monitoring purposes as it is more representative of current climatic conditions. It allows a consistent reporting of information from satellite and reanalysis systems, some of which do not extend back to 1960, alongside with traditional data sets based on surface-observations. For global average temperatures, the 1981-2010 period is approximately

0.31±0.02°C warmer than that of 1961-1990. The change in the baselines has no influence on trend analysis.

In this WMO statement, the period 1880-1900 has been used as a reference period for pre-industrial conditions allowing early instrumental observations to be used for estimating pre-industrial temperature conditions.

Information used in this report is sourced from a large number of National Meteorological and Hydrological Services (NMHSs) and associated institutions, as well as the World Climate Research Programme (WCRP) and the Global Atmosphere Watch (GAW). Information has also been supplied by a number of other UN agencies, including the Food and Agriculture Organization (FAO), the World Food Program (WFP), the World Health Organization (WHO), the UN High Commissioner for Refugees (UNHCR), the International Organization for Migration (IOM), the International Monetary Fund (IMF), the UN International Strategy for Disaster Reduction (UNISDR) and the Intergovernmental Oceanographic Commission of UNESCO (IOC-UNESCO).

IFC Report Finds Policy Reforms, Innovation Can Unlock Trillions in Climate Finance

Washington, D.C., November 2, 2017—Developing countries can meet climate targets promised in the landmark Paris Agreement by catalyzing trillions of dollars in private investments through a combination of smart policy reforms and innovative business models, according to a new report by IFC, a member of the World Bank Group.

The report identifies seven industry sectors that can make a crucial difference in catalyzing private investment: renewable energy, off-grid solar and energy storage, agribusiness, green buildings, urban transportation, water, and urban waste management. Already, more than $1 trillion in investments are flowing into climate-related projects in these areas. But trillions more could be triggered by creating the right business conditions in emerging markets, the report found.

“The private sector holds the key to fighting climate change,” said IFC CEO Philippe Le Houérou. “The private sector has the innovation, the financing, and the tools. We can help unlock more private sector investment, but this also requires government reforms as well as innovative business models—which together will create new markets and attract the necessary investment. This can fulfill the promise of Paris.”

IFC’s Creating Markets for Climate Business report offers several examples of such an approach. On Sunday, Egyptian officials signed an agreement to create the world’s largest solar park. IFC provided a  landmark $653 million debt package that will finance the construction of 13 solar power plants near the Egyptian city of Aswan. The agreement occurred only after a series of reforms by the government and the creation of innovative financing structures. It is expected to lower electricity generation costs and reduce Egypt’s dependence on imported fossil fuels.

The report’s findings point to specific investment opportunities including:

· Renewable energy investments could climb to $11 trillion cumulative by 2040—reforms such as renewable energy auctions, land title reforms, and supportive energy storage policy frameworks would make this possible.

· Investments in off-grid solar and energy storage can reach $23 billion a year by 2025 —if countries use differentiated tariffs, clear technical and safety standards, and targeted financial incentives while supporting new business models for community based solar such as Pay-as-You-Go and innovative finance solutions such as securitization assets.

· Trillions of dollars of agribusiness investment can become more “climate-smart”—if governments ensure property rights, good transportation infrastructure, and regulations and fiscal policies that encourage climate-smart investment while promoting improved farmer-training practices and using financial innovation to provide working capital for farmers.

· Investments in green buildings could reach $3.4 trillion cumulative by 2025 in key emerging markets—if countries adopt better building codes and standards and create targeted financial incentives such as green-building certification and mandatory benchmarking of energy use. Other important reforms should encourage new utility business models, such as green mortgages and energy service companies.

· Trillions of dollars in investments in sustainable urban transportation can be mobilized in the coming decade—if governments issue mandates to enable infrastructure investments and adopt municipal transit plans that can spur innovations, such as light rail.

· Investments in water supply and sanitation could exceed $13 trillion cumulative by 2030—for this governments would need to establish water pricing at predictable and sustainable levels to increase the creditworthiness of utilities while entering into public-private partnerships and adopting performance-based contracts.

· Investments in climate-smart urban waste management could reach $2 trillion—if cities work to attract private sector participation through improved regulatory and enforcement frameworks, using economic incentives and cost-recovery mechanisms such as feed-in tariffs, and driving waste-conscious consumer behavior.

Addressing climate change is a strategic priority for IFC. Since 2005, IFC has invested $18.3 billion of its own funds in long-term financing for climate-smart projects and mobilized an additional $11 billion from other investors. The latest report is a follow-up to the Climate Investment Opportunities report issued by IFC last year, which found that the Paris Agreement could create $23 trillion in investment opportunities for 21 emerging-market countries.

About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY17, we delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit www.ifc.org

The World Benchmarking Alliance launches global consultation

Aviva, in partnership with Index Initiative, the United Nations Foundation and the Business and Sustainable Development Commission, will today launch the consultation phase of the World Benchmarking Alliance (WBA). This global multi-stakeholder initiative will develop and publish free to access, publicly available benchmarks ranking companies on their sustainability performance and contributions towards achieving the Sustainable Development Goals (SDGs).

Over the next nine months, the WBA founding partners will lead a global consultation to explore the opportunity and potential for using the benchmarks to measure, motivate, and reward business action on the SDGs. The UK, Danish and Dutch governments have committed funding to the consultation phase, in addition to funding and support from Aviva.

The launch follows Aviva Chief Executive Officer, Mark Wilson’s call at the 2015 UN General Assembly for the UN to help change the rules of the international financial system to become more sustainable and for businesses to play their part in contributing to delivery of the SDGs.

The Business and Sustainable Development Commission (BSDC) supported the concept and creation of corporate Global Goal benchmarks and the World Benchmarking Alliance in its landmark report “Better Business, Better World”. The report, published in January 2017, outlined the $12 trillion economic opportunity for business in pursuing sustainable and inclusive business models and the creation of 380 million jobs by 2030.

Speaking today in New York at the UN Global Compact Leaders Summit on the margins of the 72nd session of the UN General Assembly in “Global Goals Week”, Mark Wilson, said:

“Our idea is simple. We turn the SDGs into a corporate competitive sport. We draw up transparent data on performance towards meeting the SDGs, and we rank companies according to how well they are doing. This will motivate a race to the top and is what the proposed World Benchmarking Alliance is all about.”

Kathy Calvin, President and CEO of the UN Foundation, said; “Business today faces a simple choice, embrace sustainable development or risk getting left behind. Benchmarks create a common mechanism for companies to accelerate their sustainability performance and – more importantly – they change the status quo by enabling business, government and civil society to hold each other accountable in creating a world that is good for business, people, and the planet.”

Wim Leereveld, Chairman, Index Initiative and Founder Access to Medicines Index said; “Ranking companies on their actual behaviour doesn’t only drive the top of the list to set new boundaries, it also stimulates the companies in the lower regions to adapt their strategy and behaviour.”

The Governments providing support to the WBA consultation also commented:

Ulla Tørnæs, Minister for Development Cooperation, Ministry of Foreign Affairs of Denmark said; ‘We need more businesses of all sizes and investors to embrace the UN Sustainable Development Goals. Benchmarks can translate the SDGs into a business and innovation agenda, creating clarity on the unique role and abilities of companies to contribute to sustainable development in developing countries. Clarity on the role of business will equally demonstrate where we as governments must step up’

Lilianne Ploumen, Minister for Foreign Trade and Development Cooperation, The Netherlands said;  “Civil society, investors and governments need to collectively voice what we expect from industry. And then work together with industry to unlock the full potential of the private sector. Initiatives like the World Benchmarking Alliance enable us to embrace a more productive and sustainable approach that benefits all of us.”

ends

Media enquiries:

Aviva:

Heleana Greeves    +44 (0)20 7662 0405

Andrew Reid    +44 (0)20 7662 3131

Index Initiative:

Gonnie Been  g.been@indexinitiative.org   +31 651203963

UN Foundation:

Caleb Tiller   ctiller@unfoundation.org.   +1 202 887 9040

 

Notes to editors:

About the global World Benchmarking Alliance consultation:

Over the next 9 months, global and regional consultative roundtables and outreach events will be held, in addition to an online consultation accessible to all.  The consultation will scope a set of priority corporate performance focussed SDG benchmarks with global stakeholders. There will also be consultation on the institutional and organisational design of the proposed World Benchmarking Alliance.  Organisations that support the concept and ambitions of the World Benchmarking Alliance are invited to become allies to the consultation and actively participate. Allies to date include the EAT Foundation, The Global Foundation, the Inter American Development Bank, Nordea and The United National Global Compact. Allies to the consultation continue to grow and more can be found at: www.worldbenchmarkingalliance.org

About the founding partners:

BSDC The Business Commission aims to make a powerful business case for achieving a sustainable and inclusive economy. The flagship report ‘Better Business, Better World” launched in January 2017, maps the economic prize for companies that align with the Global Goals and shows how to achieve them. The Business Commission is chaired by Lord Mark Malloch-Brown; Mark Wilson serves as a Commissioner.  Learn more at www.businesscommission.org

Index Initiative Index Initiative is a centre of expertise in benchmarking corporate performance against stakeholder expectations. It seeks to propel the use of benchmarks to engage and bring purpose and clarity on the role of companies in contributing to the SDGs closest to their core business. A non-profit based in Amsterdam, The Netherlands, Index Initiative’s research and benchmarks are free and accessible to all.  Index Initiative will conduct the global consultation on the World Benchmarking Alliance   www.indexinitiative.org

United Nations Foundation The United Nations Foundation builds public-private partnerships to address the world’s most pressing problems, and broadens support for the United Nations through advocacy and public outreach. Through innovative campaigns and initiatives, the Foundation connects people, ideas, and resources to help the UN solve global problems. The Foundation was created in 1998 as a U.S. public charity by entrepreneur and philanthropist Ted Turner and now is supported by philanthropic, corporate, government, and individual donors. Learn more at: www.unfoundation.org.

Aviva

Aviva provides life insurance, general insurance, health insurance and asset management to 33 million customers, across 16 markets worldwide.

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CelsiusPro launches parametric quake & cyclone emergency cash cover

by Artemis on August 30, 2017

Swiss headquartered weather index insurance and parametric risk transfer specialist CelsiusPro AG has launched a new disaster insurance solution designed to rapidly pay out emergency cash when earthquakes or tropical cyclones strike.

CelsiusPro has been offering weather derivatives and index insurance for years but this is its first parametric emergency cash insurance product, recognising that rapid pay outs and distribution of cash is vital after disasters strike.

It’s another example of a parametric product that will eventually require reinsurance market support, if successful and could be attractive to ILS fund managers looking to move into emerging regions.

Mark Rüegg, CEO of CelsiusPro, explained; “Providing a fast and efficient payout to bridge the first weeks after a disaster is critical for the survival and future economic prosperity of the affected areas. In order to provide cash immediately to cope with the catastrophe, we are launching parametric insurance for earthquakes and tropical cyclones.”

The products are available to the Philippines nationwide and also on a global basis, as CelsiusPro says it has the ability to model the effect of catastrophic events in high-resolution globally.

The company notes that parametric insurance solutions are based on the actual event data, from official and third-party reporting agencies. With payouts linked directly to the intensity of a catastrophe event and not requiring a lengthy claims assessment damages incurred, parametric insurance loss payments can be distributed much more quickly to aid recovery.

CelsiusPro says it is already in advanced discussions with local insurers in countries such as the Philippines to help them introduce new catastrophe insurance products for their clients.

CelsiusPro undertakes structuring, pricing and execution of the policies and their settlement, on behalf of partners. Noting that the Philippines government itself recognises the importance of parametric triggers for disaster insurance, having launched its own parametric insurance project with the support of the World Bank recently.

CatPro Earthquake is CelsiusPro’s emergency cash parametric earthquake insurance product. The trigger is based on the peak spectral acceleration (PSA) and peak ground acceleration (PGA) of an earthquake in the location of an insured.

“PSA and PGA data is provided with a 2 by 2 km resolution about the maximum acceleration that occurs during an earthquake at a given location on the surface. The earthquake loss is estimated by PSA data provided by the US Geological Survey, and based on a pre-defined loss settlement process the emergency cash amount is paid to the policyholder within days of a disaster,” the company explained.

CatPro Tropical Cyclone is the equivalent but for cyclone emergency cash insurance, with triggers linked to maximum sustained winds and the radius of maximum winds during a storm, using data from recognised meteorological agencies. CelsiusPro said it has developed a quantitative risk model specifically for this parametric product, to perform temporal and spatial interpolation of storm data between the officially available measurement points.

The company believes that the “significant increase in granularity” of this product enables it to offer a nationwide parametric tropical cyclone insurance product to the Philippines.

CelsiusPro policies are dealt with and administered via the firms online technology platform, keeping costs low. Automated pricing and calculation of triggers means payouts can be made rapidly and cash disbursed almost immediately after events.

CelsiusPro said that the parametric emergency cash products are suitable for insurance companies, government agencies and microfinance institutions in regions at risk of disasters and can easily be replicated in any potential market around the globe.

Such products would also be suitable to corporations looking to reduce their deductibles on wind and quake policies, or for those just seeking to secure a layer of cover that can payout very quickly and provide recovery funds.

The use of parametric triggers in commercial insurance scenarios would need much greater reinsurance support, but can also provide significant benefits for covering business interruption caused by catastrophes.

Of course the concept of an emergency cash insurance product also applies to much larger organisations, as funds to recover from disaster are required by corporations, insurance and reinsurance firms, however the key is in finding how to calibrate parametric triggers to fit alongside (benath/above/beside) indemnity type coverage.

CelsiusPro is targeting the Philippines with this product, but has the ability to roll it out globally if demand allows.

There has been something of a resurgence of interest in parametric coverage in the last year, with an increasing number recognising its importance in disaster relief, emergency funding and also as a risk transfer tool calibrated to payout based on specific disaster parameters.