The US state of Delaware is to participate in the National Association of Insurance Commissioners’ (NAIC) Insurer Climate Risk Disclosure Survey, in an effort to assess how the impacts of climate change could reverberate across the insurance industry.
Some 82 Delaware insurers that reported $100 million or more in 2020 premiums have been asked to respond to questions about their investment and risk management policies.
This includes their processes to identify, assess, and reduce climate-related risks, actions taken to encourage policyholder mitigation efforts and engage key constituencies in climate-based discussions, as well as information about a company’s existing analysis of risk and its climate-related goals, such as reducing emissions.
The changing environment means that “insurance must be a changing industry”, says the NAIC, with its effects being felt across investment practices, increased claim occurrences which impact companies’ financial sturdiness, and the access that consumers have to insurance products .
Insurance departments throughout the US are working to evaluate both risks to the industry, and its resiliency in responding to those challenges to ensure continued market stability through several mechanisms, including the NAIC’s Climate and Resiliency Task Force and the eight-section survey.
In total, over 1,200 insurers are expected to complete the survey, representing more than 70 per cent of the US insurance market.
The California Department of Insurance, who asked the state of Delaware to participate in this year’s survey, will compile the data of all participating states and issue a public report.
The closing date for survey submissions is 31 August 2021.
Insurance commissioner Trinidad Navarro says: “In Delaware and across the country, residents are feeling the impacts of climate change, and relying on insurers to respond to the heightened risk of damage to our properties, businesses, homes, and lives. As natural disasters occur more frequently and with more intensity, the industry must be prepared to provide rapid response.”
He adds: “Through participating in the Climate Risk Disclosure Survey we can better understand how prepared Delaware insurers are for these events and what opportunities we have to protect residents from these effects.”
