Analysing and mitigating the effects of climate change, such as floods and windstorms, have become pressing issues for risk managers, according to Gaëtan Lefèvre, chairman of the Belgian risk management association BELRIM.
Gaëtan is the moderator of a workshop on climate change at the Risk Management Forum of the Federation of European Risk Management Associations (FERMA), which will begin on 29 September in Maastricht.
He says, “We see how natural catastrophes are changing, becoming more severe. The problem is moving from the scientific understanding of what is happening to the climate and translating it into a risk management application in business. But it is a pressing issue for risk managers to analyse their company’s exposures and what mitigation measures are possible.”
In Europe, the main climate related risks are from floods and windstorms, Gaëtan explains. Flood is especially relevant in Belgium, and in the Netherlands. In the Netherlands even some companies find it very difficult to get flood insurance.
For most companies, the business interruption consequences of these perils are likely to be more serious financially than physical damage, but highly regulated industries such as pharmaceuticals and chemicals can have major losses to their property or from pollution.
Even without the influence of climate change, the floods in Thailand and earthquake and tsunami in Japan, both in 2011, really made businesses aware of interdependences, how complex the links are between businesses, and how widespread the losses can be when something like this happens, Gaëtan comments.
The workshop at the Forum will begin with a presentation of climate change science by Professor Lucka Kajfez Bogata, Climatology Professor at the University of Ljubljana. Professor Bogata has been a member of working groups in the Intergovernmental Panel on Climate Change (IPCC).
There will then be an introduction to ‘cindynics’, known as the science of danger, as a method for approaching the multiple interactions that create the climate and its relationship with human activity.
Insurers will consider two aspects of climate change: first, how they see it as a risk and how as an opportunity and integrate that into their policies, and second, how it affects their views on insurability.