Investment management group takes climate change seriously

Europe

F&C Asset Management, the European wide investment group with assets of £112bn, is focusing on climate change and its implications for the insurance sector. Indeed, the company has written to 29 of the biggest insurance companies (12 in Europe, 16 in North America and one in Japan) to enquire about their strategy for addressing the implications of climate change for their business. F&C is interested in how insurers are adjusting their underwriting models to reflect increases in climate-related risk; in how climate-risk exposure is evaluated in insurers’ equity investments; in whether insurers offer any products that might incentivise reductions in emissions; and in whether public policy changes could be made that would allow insurance pricing accurately to reflect underlying climate-related risk. F&C has identified seven key trends that it believes pose a challenge to the insurance sector as a whole, whether through the prospect of higher and less predictable payouts, or downward pressure on asset management returns over the long term.