Risk transfer in the context of climate change

Climate change is now recognized as a critical issue for the global insurance and reinsurance companies. For example, in 2005, a record amount of more than US$100bn was paid out by the insurance industry to help the international community cope with the financial consequences of weather-related catastrophes. More recently, Swiss Re launched its Climate Adaptation Development Programme (CADP) at the Clinton Global Initiative 2007 meeting. The Programme is designed to develop a financial risk transfer market for the effects of adverse weather in emerging countries. Swiss Re chief executive, Jacques Aigrain , addressed the High-Level Event on Climate Change in New York convened by the Secretary-General of the United Nations. The following is an edited extract of Mr Aigrain’s speech, “The Future in our Hands: Addressing the Leadership Challenge of Climate Change”.