Climate change: The insurance industry and the South African environment
This article considers the impacts of climate change on the insurance industry, with a focus on action being taken in South Africa. The report first discusses how climate change affects 10 different aspects of insurance: claim frequency and severity, business volumes, regulation and legislation, operational risk, reputation, asset backing liabilities, pricing, capital and reserving, product innovation, and reinsurance. The article then shows how average temperatures have risen in South Africa over the last seven decades, and gives examples of eight natural disasters experienced by the country from 2017 to 2021. South African regulation and green investment are also covered. The article concludes with ways Milliman can assist in climate-related risk management.