London's insurance market could double in size thanks to the various opportunities presented by the global transition to net-zero emissions, analysis suggests.
The findings from the London and International Insurance Brokers’ Association's (LIIBA) indicate that net zero will necessitate $5trn (£4trn) of global investment in green energy annually by 2030.
This will require $125bn of additional insurance-related spend, which is more than the estimated $110bn value of London's insurance market.
Speaking to the All Party Parliamentary Group on Insurance and Financial Services, Christopher Croft, LIIBA CEO, said that London's insurance market would be transformed if a significant portion of that spend came to the capital.
“It will also help deliver growth in UK export earnings, UK GDP and employment,” he continued. “The positive news is that the London market is well-placed to be right at the fore of this transformative process.
“London’s brokers have a unique combination of skills and expertise that will enable their clients to make the changes necessary to achieve the net reduction in carbon emissions required.”
LIIBA said that mitigating risk associated with the transition to net zero will entail investment in and adoption of new technology, management of stranded assets as well as insurance expenditure.
Its analysis comes after the Lloyd's of London last year published a roadmap detailing how insurers can help multiple sectors transition to net zero.
This includes the development of new risk transfer solutions to provide critical, enabling support for green innovation and renewable energy investment and expansion, together with a public-private disaster resilience, response and recovery framework.
“The key for London is to ensure we seize upon this once-in-a-century opportunity by brokers and risk carriers working together to give clients the guidance and the capital backing they need to embark on this transformational journey,” Croft added.
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Author: Chris Seekings