Long term(Life and Liability) assurance Vs Climate Risks
Conventionally, it is assumed that Long term assurance is less affected by climate risks.
Most climate change researchers focus on short term classes as being most affected by climate risks due to the direct nature of the impacts. For example, crop failures, post harvest climate effects, droughts leading to fodder failure consequently affecting livestock production mainly in nomadic regions and pests and diseases catalyzed by climate change.
However, the impacts on long term assurance is quite underrated, yet very significant and whose impacts can be worse than those experienced in short term forms of insurance. For instance, Climate change as is being witnessed around the world through increasing temperatures, have a potential of impacting on Agricultural sector through massive crop yields, which leads to food insecurity hence increasing the chances of experiences extreme poverty that can lead to increased mortality rates.
Increasing temperatures, coupled with availability of moisture can create fertile grounds for disease vectors like Malaria and cholera, whose outbreaks can have very high impacts; through increased ill health and mortalities of the affected populations.
In addition, Wind storms can exacerbate the likelihood of experiencing cardiovascular diseases that increases likelihood of increased mortality.
Climate risks like floods, droughts, heat waves and extreme cold, can lead to massive impacts on affected populations through increased mortality rates, disease outbreaks e.g. cholera due to flooding and also, increases the need for mobility that exposes the populations to further risks like accidents, diseases etc.
To address these impacts, there's need for life assurance companies to develop and adopt emerging technologies, including but not restricted to climate monitoring mobile apps, weather based indices, early warning mechanisms etc.
In addition, adoption and implementation of climate smart strategies within the respective assurers Corporate Social Responsibilities (CSR), can go a long way in encouraging and enlightening the communities on climate risks and possible mitigation strategies. By such, there will be lower climate risk exposure, hence a decline in premiums charged.
Chopped by
