Ex-Lloyd’s CEO: “We’ve got to do something about” NZIA exit

At the International Congress of Actuaries in Sydney, former Lloyd’s of London CEO, Dame Inga Beale (pictured above), called on the insurance industry to take steps to correct the exit of major insurers from the Net Zero Alliance. No longer representing a particular company, Beale said he “speaks from the heart.”

“The insurance sector cannot turn its back on its responsibility to try and meet the climate targets of the Paris Agreement,” he said in his keynote address. “We have to continue to drive that.”

Beale said the exodus of nine global insurers from the Net Zero Alliance indicates division “in this divided world.” He said it was “very concerning” that the “rhetoric” of the United States could cause insurers to leave an alliance for fear of potential lawsuits and antitrust actions by regulators.

Beale calls for action on climate change

“As an insurance industry, in our way, however we can avoid it, we have to do something about it,” Beale said. “De-decarbonization is essential.”

He has discussed the significant insurance impacts of climate change increasing natural disasters, including when he was running Lloyd’s.

“We know from all the analysis that actuaries do that when we go back to Superstorm Sandy [in 2012] “$8 billion out of the $70 billion cost of that disaster comes only from the rise of the sea level in the last few decades,” said Lloyd’s former chief. “That’s climate change, it’s a real economic impact.”

Beale said the current geopolitical situation, including the war in Ukraine, United States/China tension and rising nationalism, is very worrying. He said he was surprised by this dire state of affairs in the world and compared it against the success of globalization that lifted millions of people out of poverty.

“People benefited from it but then, a few years ago, everything started to fall apart,” Beale said. “No, I never imagined there would be a war in Europe in my lifetime after decades of peace,” he said.

The tension between the US and China

Beale is particularly concerned about the technological and economic war between the United States and China.

“Those two countries control 40% of the world’s GDP,” he said. “We cannot ignore the fact that they cannot continue now.”

Beale said this “disruption” allowed Russian leader Putin to begin implementing his “mastermind plan.”

3Ds: De-carbonization, digitalization and diversity

However, he said the global situation “worries me but I can’t really do anything about that.” However, Beale said his personal response is to focus on the things he can do.

In the world of insurance, he says his focus is on the “three Ds”: De-carbonization, digitization and diversity.

Beale has spent more than four decades in the insurance industry. In 2013 she became the first female CEO in Lloyd’s three hundred year history. He resigned in 2018 after transforming the iconic firm’s workplace, both by diversifying its employees and using digital technology.

Flannery calls for a 75% emissions cut by 2030

Professor Tim Flannery, one of Australia’s leading climate advocates and authors, followed Beale with a presentation on climate change.

He called on Australia to set a new emissions target of 75% reduction by 2030. Flannery said even the most optimistic scenarios expected a rise in global temperatures of 1.8 to 1.9 degrees Celsius, which would require half of the world’s emissions.

Flannery sets this “enormous task” against the fact that, in the past 15 years, humanity has emitted about one-third of all the greenhouse gases we’ve ever emitted.

“The extremes we experience a decade from now will be outside of anything we’ve seen so far,” he said. “Although we are cutting emissions as hard and fast as we can.”

For example, he expects the city of Shanghai to be 90% underwater by 2100 unless major mitigation efforts take place.

Flannery said “enormous adaptations” are needed to strengthen food security, water security, fire and flood and health impacts. “The challenges are difficult to understand,” he said.

In a graphic example, he said, the downpipes of every house in Sydney had to expand to cope with the increased amount of rainwater.

International Congress of Actuaries

For the first time in almost 40 years, the International Congress of Actuaries took place in Australia. The event in Sydney brought together around 1500 actuaries and other stakeholders – including those from the insurance industry – and continues until Thursday.

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