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Explosive growth in renewable energy industries such as offshore wind and hydropower are driving significant demand for climate-related insurance solutions.

Data from Bain & Company shows premium revenue growth for commercial climate insurance solutions is set to more than double from around €25 billion (US$27.6 billion) in 2022 to €60 billion by 2030. 

Solutions related to renewable energy, biodiversity, environmental liability, carbon offset, new infrastructure, mobility, and advisory services will all grow significantly, according to the global consulting firm.

Some of these technologies are already familiar territory for many insurers. At the same time, newer technologies are emerging, promising growth opportunities but also substantial risks.

Three categories of climate-related insurance markets

Speaking to Insurance Business, Dr. Christian Graf, who leads the sustainability & responsibility financial services practice across EMEA for Bain & Company, noted three main categories of climate-related markets.

First, renewables like photovoltaic, offshore wind, and hydropower. These are already a well-established market for insurance companies and are currently the largest in climate solutions. “Despite its maturity, we expect it to grow significantly—about 6-10% annually,” said Graf.

Second, nascent technologies particularly around carbon capture, utilisation, and storage (CCUS), are developing rapidly. “These technologies aren’t yet at scale, so the market is still small. However, by 2030, we expect this market to grow by more than 50% annually and become significant in five to six years,” said Graf.

Finally, Bain & Company noted increasing demand for advisory services related to physical risks and climate solutions. Graf noted: “While not directly tied to gross premiums, this is another segment that will drive growth going forward.”

How are carriers approaching climate insurance?

Renewables are proving to be a crucial focus for insurers seeking to meet climate goals and align their portfolios with cleaner energy sources. However, insurers face a tricky balancing act: they must decide when and how to enter these markets without exposing themselves to unknown risks.

Insurers are taking varied approaches to these nascent technologies. According to Graf, there are broadly three types of players in this space.

The first group is taking a cautious approach, sticking to well-understood risks. “They purposely take the strategic decision as of today to focus on the risks that they know,” Graf said.

These companies are also willing to wait a few more years to see how technologies like CCUS evolve before they commit to insuring their risks.

On the other hand, the second group of insurers is more aggressive, seeing an advantage in being early movers. These companies want to familiarise themselves with emerging risks and technologies while competitors wait on the sidelines.

“They try to be the first movers to learn and gather a lot of data,” said Graf. Their rationale is that by entering the market early, they can gain a critical edge, acquiring knowledge and data that will help them scale more easily in the future.

However, early entry comes with downsides. Insurers venturing into these new areas must be careful not to let optimism about growth cloud their judgement. To price their policies effectively, insurers also need a deep understanding of the underlying exposures.

“It also involves investments on the side of the insurers,” Graf noted. “You have to understand the technology behind carbon capture. How will it scale over time?”

For the cautious players, balancing profitability in a rapidly evolving sector like climate insurance will prove challenging. In established markets, competition is already fierce. For insurers, this heightened competition can squeeze profit margins, making it harder to maintain strong financial performance.

What does growth in the climate insurance space mean for brokers?

Beyond underwriting and risk management, advisory services are also emerging as a significant area of growth.

Advisory services aren’t just a growth opportunity for insurers themselves—brokers are also well-positioned to tap into this market. Graf noted that both insurers and brokers are trying to capture a slice of the advisory pie, with many insurers making heavy investments to scale their offerings.

“A lot of players are trying to break into this advisory space, and I see insurance companies investing heavily in scaling these services across the industry, from carriers to brokers and MGAs,” said Graf.

Do you have something to say about the growth in climate-related insurance solutions? Please share your comments below.

Nearly three in four employees in Amazon are planning to quit as they express strong dissatisfaction over the company’s mandate to work five days a week starting next year.

In a survey among 2,585 Amazon professionals in the United States, anonymous job review site Blind discovered that 73% of employees are considering looking for a new job because of the mandate.

Another 80% said they know someone who is already looking for another job because of the new policy, while 32% said they know someone who has quit because of it.

^{Source: Blind}

Amazon CEO Andy Jassy announced earlier this month that they are expecting employees to be back in the workplace five days a week starting January 2025 as they “believe that the advantages of being together in the office are significant.”

Jassy, in his announcement earlier this month, said they observed that in-office work makes it easier for teammates to learn, model, practice, and strengthen their culture.

It also makes collaborating, brainstorming, and inventing simpler and more effective, as well as makes teaching and learning more seamless, according to the CEO.

Dissatisfaction in Amazon’s workforce

But employees aren’t too pleased with the company’s order. An internal survey circulated by employees on Slack revealed that employees are “strongly dissatisfied” with the in-office mandate.

One verified Amazon professional said on Blind that their “morale for this job is gone, [I’m going to] totally check out till PIP (Performance Improvement Plan).”

^{Source: Blind}

Who will likely leave Amazon?

Pavel Shynkarenko, founder of HR platform Mellow, predicts that higher-level employees who enjoy the perks from remote work would likely resign.

“It’s likely that high-level managers and highly skilled employees will be the ones to leave, especially those over 40 with families who benefit most from remote work,” Shynkarenko said in a statement to HRD.

Younger employees, such as Gen Zs, on the other hand, might stay put despite wanting to leave as jobs are currently hard to find, he added.

“We won’t know the full impact until mid-2025 when these changes are fully implemented,” Shynkarenko said.

UserTesting, a provider of experience research, has released a global survey examining consumer preferences for insurance advice and the potential role of artificial intelligence (AI) in the insurance industry.

The survey – conducted by Talker Research – surveyed 4,000 adults across Australia, the US, and the UK.

According to the survey, 56% of respondents would rather endure everyday inconveniences – such as sitting in traffic (10%), moving back in with parents (19%), or attending a disliked concert (24%) – than navigate insurance enrolment, illustrating widespread frustration with current processes.

Insurance complexity and technology adaptation

The survey highlighted the ongoing challenges consumers face with insurance, particularly around enrolment and provider selection.

While many respondents feel confident in their understanding of their coverage, the complexity of choosing the right insurance provider and navigating the insurance landscape remains a significant pain point.

Comparing hassles

Survey participants across Australia, the US, and the UK showed a clear preference for dealing with unrelated frustrations over managing insurance complexities:

• 13% of US respondents said they would rather sit in traffic, compared to 9% of UK and Australian respondents.
• 14% of US participants would listen to one song on repeat for an extended period, while 12% of those in the UK and Australia would do the same.
• 22% of US respondents would choose to live with their parents again, compared to 18% in the UK and Australia.

Coverage confidence versus provider confusion

While many consumers expressed confidence in their coverage, choosing a provider remained a challenge: 65% of US respondents, 68% in the UK, and 60% in Australia said they were confident in understanding their insurance coverage.

However, selecting the best provider continues to present difficulties for a significant portion of respondents.

Knowledge gaps

The survey also identified areas where consumers feel most and least informed about their insurance options:

• In the US, respondents expressed the most confidence in health insurance (78%) and auto insurance (75%).
• In the UK, the highest confidence was in home insurance (75%) and auto insurance (68%).
• Australians showed the most confidence in auto (72%) and health insurance (69%).

Conversely, Americans reported the lowest levels of confidence in home (61%) and pet insurance (49%). UK respondents were least confident in pet (53%) and dental (44%) insurance, while Australians felt least knowledgeable about dental (42%) and pet (41%) insurance.

Ongoing issues

Despite their confidence in coverage, many consumers still struggle with aspects of the insurance process:

• 27% of US respondents, 28% in the UK, and 32% in Australia reported challenges in understanding the details of their coverage.
• Unanticipated premium increases were cited as a concern by 24% of US respondents, 23% in the UK, and 27% in Australia.
• Complicated claims processes were an issue for 20% of US respondents and 23% of respondents in both the UK and Australia.

AI as an emerging tool for insurance

Although human advisors remain the preferred choice for most consumers, AI is increasingly seen as a tool that can help simplify insurance decisions.

The survey revealed that 36% of respondents in the US and UK, and 25% in Australia, believe AI can assist in understanding complex insurance information.

Looking ahead, 45% of Australians, 39% of UK respondents, and 33% of US respondents think AI could play a useful role in comparing insurance plans.

Bee Nookala, principal marketing manager for insurance solutions at UserTesting, commented that consumers are asking for more transparent and straightforward insurance processes.

“While human advisors remain critical, AI offers insurers a way to help customers navigate complex policies more efficiently, provided human support is always an option when needed,” she said.

Virgin Money has expanded its insurance offerings by launching new home and landlord insurance products in collaboration with insurtech firm Uinsure. Virgin Money stopped offering its home insurance products in August 2021 as part of a broader strategic review aimed at simplifying its product offerings and focusing on core areas of business such as mortgages, savings, and current accounts.

Founded in 2007 and based in Manchester, Uinsure has developed what it calls a “frictionless” platform that allows customers to obtain insurance quickly and easily. Its UinsureCX product tracks mortgage progress and triggers relevant communications throughout the mortgage cycle, ensuring customers receive the right insurance offerings at the most appropriate times.

The partnership plans to introduce a streamlined quote process that allows customers to obtain a five-star Defaqto-rated insurance quote in as little as 30 seconds. It also ensures that new business and renewal quotes automatically reflect the lowest price available from Uinsure’s panel of underwriters.

The bank said the new insurance products are designed to meet the needs of both homeowners and landlords, and are backed by Uinsure’s customer service, reflected in its ‘Excellent’ Trustpilot rating.

Virgin Money’s home insurance product offers £1 million in building cover and £75,000 in contents cover as standard. The product also features automatic re-broking at renewal, ensuring customers receive competitive pricing year after year. The fee structure is transparent, with no charges for policy cancellations or mid-term adjustments.

The new insurance is available online, and customers without internet access can take out a policy by phone. For renewals, Virgin Money also offers multiple communication options, including online, email, post, and telephone.

See LinkedIn post here.

“Virgin Money’s home insurance product offers a market-leading quote journey in as little as 30 seconds, competitive pricing through a panel of insurers, automatic re-broking at renewal, and a transparent fee structure with no hidden fees,” said Graeme Sands, head of personal banking at Virgin Money. “In collaboration with Uinsure, who will administer our home insurance product, we provide customers with simplicity, quality, and transparency.”

Martin Schulthiess, group managing director at Uinsure, added that their technology enables the customers to “enjoy an insurance journey that’s free of the complexities they might previously have struggled with.”

“The Virgin brand is one of the most recognised globally, with a long history of pushing boundaries and innovating for the benefit of its customers,” Schulthiess said. “That way of thinking very much mirrors our own way of working and we’re extremely excited to commence our partnership with Virgin Money.”

Uinsure, led by CEO Simon Taylor, has seen substantial growth backed by LDC, a Llloyds Banking Group private equity firm. LDC’s investment in 2024 is part of a broader strategy to help Uinsure expand its market share, enter new markets, and grow its partnerships with intermediaries, building societies, and banks.

The International Federation of Red Cross and Red Crescent Societies (IFRC) has announced a historic milestone in humanitarian finance: for the first time, the Disaster Response Emergency Fund (DREF) has triggered an insurance payout due to rising demands for disaster relief surpassing its established deductible threshold.

The IFRC-DREF is a funding mechanism designed to provide immediate assistance to National Red Cross and Red Crescent Societies during disasters, particularly for smaller emergencies that might not receive global attention. According to a news release, the fund often faced challenges with depleting resources before the end of the year, prompting the IFRC to pursue an innovative solution. The IFRC secured an indemnity insurance policy with global broker Aon and its reinsurers.

Since early 2023, the DREF has been insured on an indemnity basis for an annual premium of CHF 3 million (approximately $3.4 million). The insurance policy allows for a potential payout of up to CHF 15 million ($16.8 million) when demands on the DREF related to natural hazard disasters exceed a deductible threshold of CHF 33 million in a calendar year. Once this threshold is surpassed, the commercial insurance will cover further demands on the fund.

Threshold reached for the first time

In 2023, the deductible threshold was not met, and the policy did not pay out. However, 2024 marked a turning point as the combined allocations responding to various natural hazards, particularly the recent Super Typhoon Yagi in Asia, pushed the DREF spend over the CHF 33 million mark. By the end of September, nearly 100 separate allocations had been made through the DREF, underscoring the escalating need for humanitarian aid.

Nena Stoiljkovic, the IFRC’s undersecretary general for global relations and humanitarian diplomacy, announced the payout at an event coinciding with the United Nations General Assembly in New York.

“The triggering of the IFRC-DREF insurance policy is a significant moment,” Stoiljkovic said. “For the first time ever, a single, worldwide commercial indemnity insurance policy will pay the emergency humanitarian costs of disasters.”

Stoiljkovic emphasised the sobering scale of needs resulting from the disasters of 2024, adding, “The fact the insurance is helping with the burden is good news and proof that there are innovative finance solutions that we hope to grow in coming years.”

Looking forward, the IFRC plans to expand its DREF insurance coverage beyond natural disasters to include responses to epidemics and anticipatory actions. The organisation aims to encourage grant donors to recognise the added value of contributing to the DREF fund, especially in particularly calamitous years where their humanitarian contributions could potentially be amplified through this innovative financing model.

As climate change continues to escalate the frequency and intensity of natural disasters worldwide, such measures will be critical in ensuring timely and effective humanitarian assistance.

What are your thoughts on the impact of climate change? Share your comments below.

The Asia-Pacific (APAC) region has seen significant digital transformation in recent years, particularly accelerated by the COVID-19 pandemic. This shift has heightened cyber risks across the region, fueling a growing demand for cyber insurance solutions, according to insights from Gallagher Re.

The cyber insurance market in APAC has been expanding at a rate of nearly 50% per year, now accounting for 7% of the global market as of January 1, 2024. However, there remains considerable room for growth.

For comparison, cyber insurance premiums in the U.S. represented 0.0353% of GDP in 2022, while the average across APAC was only 0.0025%, making it at least 14 times lower. Gallagher Re highlights that while countries like Thailand, Malaysia, Vietnam, Indonesia, and the Philippines are emerging players in this space, larger markets such as China and India also have significant potential for further penetration.

A key factor driving the future expansion of cyber insurance in APAC is regulatory pressure. Countries like Singapore and China are enforcing stricter data protection laws, and compliance often requires companies to have adequate cyber insurance coverage.

Gallagher Re notes that this regulatory push could lead to increased market penetration, particularly among small and medium enterprises (SMEs), which represent a largely untapped market in the region.

Despite the growth opportunities, challenges remain. The lack of standardization in policy wording and coverage, coupled with the fast-evolving nature of cyber threats, makes underwriting and risk assessment difficult for insurers. Gallagher Re points out that the relative lack of historical claims data in this new field adds to the complexity.

Reinsurance solutions, according to Gallagher Re, can help insurers address these issues by mitigating the financial impact of large-scale cyber incidents, allowing them to underwrite larger risks and provide more comprehensive coverage.

In the medium term, Gallagher Re expects market penetration rates to rise, particularly in the retail and SME sectors. To support this growth, insurers are likely to enhance the cyber risk management services they offer to clients, helping businesses and individuals better manage their cyber exposure. This, in turn, could reduce the frequency and severity of claims.

The advancement of data science and analytics, including artificial intelligence, is another development expected to impact the sector. Gallagher Re suggests that these technologies will improve insurers’ ability to assess risks, set more accurate pricing, and manage claims more efficiently.

As APAC governments continue to strengthen their cybersecurity regulations, the demand for cyber insurance is expected to rise further. Insurers will need to stay responsive to regulatory changes and adjust their products to meet the evolving requirements across the region.

What are your thoughts on this story? Please feel free to share your comments below.

The Bermuda International Long Term Insurers and Reinsurers (BILTIR) kicked off its 12th annual Bermuda International Life and Annuity Conference today, drawing 450 global professionals from the (re)insurance industry.

BILTIR, a trade association with more than 70 (re)insurance companies and service providers, hosted the event, which focuses exclusively on the long-term insurance and reinsurance industry in Bermuda.

This year’s conference features prominent speakers, including Doris Kearns Goodwin, the presidential historian and Pulitzer Prize-winning author, who delivered the keynote address.

Other notable speakers include Petra Hielkema, chairperson of the European Insurance and Occupational Pensions Authority (EIOPA); Andy Mais, president of the National Association of Insurance Commissioners (NAIC); and Craig Swan, CEO of the Bermuda Monetary Authority (BMA), among other industry leaders.

Discussions throughout the day focus on global regulatory frameworks and the growth opportunities within the long-term insurance sector. Sessions cover topics such as the role of strong regulations, capital management, and expertise in the industry.

Panelists are expected to address why Japanese life insurers are increasingly seeking reinsurance opportunities in Bermuda, as well as how insurers are working to bridge the protection gap and optimize their asset and liability strategies.

In addition to the formal speaking sessions, the event provides networking opportunities for attendees, allowing industry peers to continue discussions sparked by the presentations.

Suzanne Williams-Charles (pictured above), CEO of BILTIR, highlighted Bermuda’s role in driving these discussions, stating that the island is a prime location to explore key industry trends.

“There’s a clear appetite for the industry to come together and create conversations around the future of the industry – in fact, we sold out this year’s event faster than ever before,” she said.

BILTIR represents the long-term insurers and reinsurers in Bermuda, advocating for the interests of its members. The organization’s membership includes over 70 businesses in the life insurance, annuity, and reinsurance sectors, as well as service providers, positioning Bermuda as a key player in the evolving global long-term insurance industry.

What are your thoughts on this story? Please feel free to share your comments below.

ReInsurance Business has unveiled its 2024 list of Elite Women in Reinsurance, which highlights prominent female leaders in the reinsurance industry across Asia-Pacific, North America, and the UK.

Selection process for 2024 Elite Women in Reinsurance list

The selection process involved open nominations, where industry professionals were asked to recommend female leaders who had made significant contributions to the reinsurance sector over the past year.

Nominations were assessed based on the nominees’ professional achievements and their overall impact on the industry. ReInsurance Business then reviewed all submissions and finalised the list to recognise 50 individuals.

Tanya Dasgupta recognised as an Elite Woman

One of this year’s honourees is Tanya Dasgupta, the head of the Affinity Solutions Division at Lockton Pacific.

With over two decades of experience in the financial services sector across Australia and New Zealand, Dasgupta is noted for her leadership in developing and distributing digital products to a wide range of clients, including individual consumers, partners, and member-based organisations.

Since joining Lockton in February 2023, Dasgupta has spearheaded the introduction of Lockton Pulse, a digital platform targeting small and medium-sized enterprises (SMEs). The initiative provides clients with innovative product solutions and practical insights, all integrated into a single digital platform.

In addition to her industry contributions, Dasgupta volunteers at the Addi Road Community Centre, an organisation that addresses food insecurity and supports human rights and sustainable community development.

Employers are being warned to beef up the security of their recruitment processes to avoid becoming victims of fake employee hiring schemes.

The call came after KnowBe4 experienced and mitigated early this year an infiltration attempt by a fake IT worker from North Korea into the organisation.

Stu Sjouwerman, CEO of KnowBe4, advised employers to educate all employees involved in the hiring process to prevent similar instances in their organisations.

“[Organisations should] consider various mitigation tactics such as updating the organisation’s hiring process to include asking the candidate to submit fingerprints for identity verification purposes, threat model the organisation’s hiring process, and more,” he said in a statement.

White paper on hiring scheme released

KnowBe4 has also released a white paper providing advice on how organisations can protect themselves from the hiring scam.

The white paper contains information on what the North Korean fake industry is like, signs to look out for, as well as the ways organisations can update their hiring process to prevent recruiting fake employees.

“Fake remote employees and contractors are now something everyone needs to worry about. Every organization should be updating its hiring policies, processes, and education to reflect this new reality.”

There are common signs of this fake employee hiring scheme both during and after the hiring process, Sjouwerman said.

“We were inspired to share our experience with this unfortunate situation to bring awareness to how pervasive this situation is and to use it as a warning to help protect other organisations from falling victim.”

Sjouwerman shared that the individual showed a “high level of sophistication in creating a believable cover identity” and was able to exploit the weaknesses of their hiring and background check processes.

The fake employee’s laptop was later shut down within 25 minutes of the first security alert, with KnowBe4 saying no illegal access was gained and no data was lost or compromised.

In a recent reinsurance outlook briefing, specialists from Moody’s Ratings examined how primary insurers have had to retain more exposure to small-to-mid-sized cat events as reinsurers have withdrawn capacity or significantly increased prices.

A lot of these risk events relate to severe convective storms, noted Brandan Holmes, VP-senior credit officer at Moody’s Ratings. This has prompted primary insurers to make decisions whether to retain the risk and pay more for reinsurance, retain the risk and get comfortable managing it, or withdraw from the risk in certain higher-risk areas. Moody’s research indicates that insurers are retaining more risks, which has contributed to the difference in profitability performance between reinsurers and primaries in the past few years.

Offering his perspective, Joss Matthewman (pictured), senior director of climate change product management & strategy at Moody’s Ratings, looked to severe convection storms as an example. With regard to that peril, he highlighted that the impact of climate change remains very uncertain. “To really understand the impact of climate change, we have to think about what drives severe convective storm activity,” he said. “So, we have convective available potential energy, or CAPE, that’s a measure of the amount of energy which is available for convection. That’s really important for storm generation.

“You then have the vertical wind shear, so that’s the change in the size, wind speed or direction of the horizontal winds as you move up in the atmosphere. And then you have convective inhibition, that’s the resistance of the atmosphere to getting convection going. It’s the energy required to lift an air parcel to a level such that it can just keep on rising.”

When CAPE and vertical wind shear increase, you get a corresponding increase in the severity and frequency of these severe convective storm events. But conversely, Matthewman said, when you get more inhibition, you’re going to suppress severe convective storm activity. “So, the question really is, ‘how are these climate drivers going to be impacted by climate change?’”

What impact has climate change had to date?

Looking at the climate change impacts which have occurred to date, he noted that trends have been observed in only a small minority of regions, and even a small subset of geographies within those regions. European severe convection storm research has found that there are significant trends in combined CAPE and wind shear around the Mediterranean, but particularly in the Po Valley. That’s especially problematic, he said, as it’s an area of existing high risk for severe convective storms.

“We are seeing trends in that geography, but not really across the domain as a whole for severe convective storms,” he said. “But as for what the future could hold, projecting out the impact of climate change on those parameters which drive these severe convective storms is really challenging. Severe convective storms are driven by these micro scale processes. And the climate models which are used to produce these future climate projections really have resolutions which are on the 10s or hundreds of kilometers, so those micro scale processes can’t really be resolved at that resolution.

“And so, there’s going to be a degree of approximation which has to be made in how these events are captured in these models, and that’s going to come with higher uncertainty.”

Understanding competing effects in the context of severe convective storms

Matthewman highlighted that should there be an increase in both the convective inhibition and the CAPE, that could lead to a situation where there are fewer events overall, due to the increasing inhibition. However, the events which are seen could be more severe because of the increase in CAPE. “So, you can get that competing effect, and that’s going to impact different contracts in the insurance and reinsurance industry in different ways.

“But overall, I would say severe convective storm does remain one of the more challenging extreme weather perils when it comes to understanding both the impact climate change may have already had, but also the impact we might see in the future.”