Module 3: Systemic Risks
Insurance
We’ll start our exploration of climate and the financial system with the insurance sector. The insurance industry plays a critical role in the growth of the economy. It provides stability to the economy by reducing volatility (e.g., sudden losses) associated with uncertainty and decision-making, encouraging investment and innovation when otherwise, risk aversion might prevent it.
The following video provides a brief overview of the insurance sector and its relationship to climate-related risk.
Video attribution: “Climate change and the insurance industry” by Todd Thexton, Financial Impact of Climate Change, Adaptation Learning Network is licensed under CC BY 4.0.
If you’d like to read more about climate change and the insurance sector, read more in The impact of climate change on the UK insurance sector . Scan pages 23 – 56 only, and feel free to skip sections that cover topics that you already understand.