We understand a sustainable business requires a sustainable environment.
We acknowledge our responsibility to ensure that Sanlam, its solutions, support structures and business practices incorporate responsible environmental principles. We further recognise that climate change presents an important business and global risk that could impact the stability and quality of human society, thereby eroding the financial resilience and prosperity of our clients and the societies we operate in.
Environmental-related risks – notably extreme weather events, failure of climate change mitigation and adaption, as well as water crises – have emerged as a central feature of the global risk landscape. Because of the combined effects of climate change and poor maintenance of infrastructure, risk insurance companies are expected to cover a wider range of risks. Insurance premiums are likely to increase as insurers and reinsurers carry the burden of claims arising from severe weather events.
We understand climate change will affect our business through liability claims, impacts on certain investment portfolios and changing market dynamics. We also understand that with these risks are opportunities for new products and services. To help us understand these risks better, Sanlam joined Climatewise so that we are able to be part of the solution to the risks that affect us all.
However, low insurance penetration, especially in developing markets, has seen the protection gap widening over time. Insurers will have to look at ways of addressing penetration proactively, including raising awareness around the role they can play in risk transfer and risk management. Another area where insurers can play a bigger role is in resilient investing, e.g. infrastructure and green energy.