Many people in the world of property and casualty insurance seem to be making the same mistake – underestimating how immediately climate change will effect their industry.
The bad news? It’s here. There’s no denying that. The recent Marshall firestorm, tornados in Kentucky, even snow in Pakistan… natural events are occurring where they shouldn’t and weather patterns keep getting more and more erratic.
Not to mention, from an economic perspective these events can be hugely damaging. According to KDVR, the total insured losses of the homes damaged and destroyed in just The Marshall Fire amounted to $1 billion – and that’s looking at things only a month out.
Issues linked to our climate like extremely high temperatures, loss to natural biodiversity, and more frequent “disaster” scenarios are only going to be come more common if we continue down the path we seem to have laid for ourselves. But you know all of this. What you might not know, is how climate change and its effects might be detrimental to P&C insurers.
Let’s look at how that happens.
The changing climate and the risks that it poses put a stress on the economy, especially smaller, local ones. If these catastrophic events continue, business models will have to shift, and some won’t make it. Some risk simply can’t be insured against, which will frustrate customers and insurers alike. Stakeholders will then demand that insurance solutions also needs to shift, and argue that insurers should use their know-how to help the organizations that they service to be more adaptive in this new (for back of a better term) climate. The problem will likely come not from a lack of awareness, but a lack of an ability to respond at scale.
So, how can we respond to this risk and get ahead of the problem as best we can?
Some insurers have taken a stand and vowed publicly to distance themselves from industries with bigger carbon footprints in the next 10 to 20 years. Others have started looking at climate risk as a standard part of procedure before launching new product offerings or business operations. Those that are getting involved up front are not only doing what’s right, but making a smart business move.
The industry has a real chance to help to drive business response to climate change, and if it prepares correctly, minimize inevitable losses. What does being “green” really look like nowadays? If the P&C insurance industry can take charge of this conversation, a threat can quickly become an opportunity.
Revising the traditional business model can make it more useful for customers and more lucrative for the company. By implementing innovative technology, P&C insurers can not only do their part to address climate-risk concerns their customers face, but position themselves as a real advocate for people who are genuinely scared of losing their house in a wildfire or being affected by some other unforeseen natural disaster.
Like everything, as climate risk increases, business solutions will need to evolve. Staying connected with the people that can answer their questions, direct them to solutions and act as a sort of lifeline will only become more and more of a priority for today’s consumer. Help On Demand’s lightning-speed technology does just that – keeps Experts like you connected to your Consumers.
If you’re ready to see how our technology can be implemented into your business model, call us today.
Just turn on the news, you know you don’t have time to waste.
