Management of climate change risks was a central theme at our first event looking at the topic of resilience in London on Wednesday.
Resilience is the ability to prepare for, absorb, recover from or - better still - adapt to adverse events. The 'resilience dividend' was discussed. This is, in essence, the return on investment that cities, businesses, and others at risk from climate-related losses receive if they invest wisely in risk mitigation, risk transfer or both.
We discussed how, for example, a city can determine how high it should build its sea walls by using risk modelling techniques honed in the insurance world. Those defences can in turn reduce the cost of insurance for the city, its residents and local businesses. And if there is a major event, insurance proceeds will help the city bounce back more quickly.
Holding this event in London felt entirely appropriate. The UK punches well above its weight in the key areas of insurance, science and infrastructure. Added to which, the government is a global leader in green finance and other climate initiatives and understands that the insurance industry particularly has a key role to play, not only in the coverage it can offer, but in the expertise it has around the measurement and pricing of risk. For it's in quantifying risk that a value can be placed on resilience.
Climate change, manmade perils and pandemics are causing widespread economic disruptions meaning resilience awareness and risk management is becoming progressively more important.