By Francis Bouchard, Managing Director, Climate, Marsh McLennan
In the past six months alone, Hurricane Ian devastated southwest Florida, historic flooding inundated 33 million Pakistanis, and extreme heat melted train tracks and airport runways in the UK. These events –reinforce recent UN warnings about the urgency of climate risks, and fundamentally challenge the notion that business as usual will be sufficient to ensure an orderly transition to the new climate risk management paradigm.
Marsh McLennan is proud to help mobilize greater ambition and action to build climate change resilience by sponsoring the Resilience Hub at the COP27 meeting.
Today, the recovery mindset eclipses society’s investment in risk prevention. Financing models for loss avoidance are challenging and demand a long-time horizon. Despite knowing that every dollar spent on pre-disaster risk reduction saves between $6 and $13 in damages, 88% of today’s disaster management funds from humanitarian, development and government sources are allocated to post-event response. The figure for insurance sector payouts is even higher.
The status quo fails to prevent severe hardship for many individuals and traps communities in a cycle of recovering from the last disaster and failing to invest in preparations for the next.
There is ample opportunity for creative solutions in climate adaptation to mitigate the worst consequences of climate change and rebalance efforts towards proactive adaptation. As the world’s leading professional services firm in risk, strategy and people, Marsh McLennan is advancing transformative thinking through our work with public sector and corporate clients, the insurance sector, development agencies, NGOs, and key stakeholders, to develop a community-based catastrophe insurance pilot for flood-prone populations in New York City, a weather risk management program for small farmers in Mexico, and an extreme heat wage replacement system for outdoor workers in India.
Through the Resilience Hub, we will also shine a light on other pioneers who are advancing exciting new models for how insurance can help accelerate the deployment of climate risk reduction and adaptation strategies at the community level. Their leadership is inspiring. Our hope is that with a greater understanding of the insurance sector’s role, we can advance solutions that usher in a new era of climate risk management.
Marsh McLennan’s purpose is to be there in the moments that matter. COP27 is clearly one of those moments, and we are looking forward to engaging with public and private sector attendees on our common quest to protect communities, individuals, and businesses from the types of catastrophes we’ve seen this year.
Marsh McLennan is a headline sponsor of the 2022 Resilience Hub.