Although I have long appreciated the impact of climate change on many areas of our work for example, the emergence of new risks and stranded assets it wasnt until I met professor Aled Jones to conduct this months interview for The Actuary (p14) that I realised the real pervasiveness of climate change underlying our work.
07 SEPTEMBER 2017 | RICHARD PURCELL
Although I have long appreciated the impact of climate change on many areas of our work - for example, the emergence of new risks and stranded assets - it wasn't until I met professor Aled Jones to conduct this month's interview for The Actuary that I realised the real pervasiveness of climate change underlying our work.
In fact, Jones thinks it's so important that he believes actuaries ought to be as conversant with climate risks as we are with longevity risks. He explains his concerns for energy, water and food supply, and the indirect impact on our long-term growth and inflation assumptions. Our discussion also highlights some of the potential societal implications of climate change, including a heightened risk of civil unrest and terrorism. In this issue, Dr Rachel Anne Carter and Dan Kaszeta explain why there is already scope for more insurance against chemical and biological terrorism today.
Jones also points to social and economic inequality as another possible side-effect of climate change. One example is the protection of the green belt against development, which is having a profound effect on housing, intergenerational wealth and inequality. Richard Silveira explores the prospects for the housing market in more detail.
When it comes to shifting our society to a low carbon one, regulation can help, but Jones believes a clear direction of travel is key. For financial regulation generally, there already seems to be an increasing drive for innovation. Christopher Woolard explains how the Financial Conduct Authority’s innovative regulatory sandbox provides an effective test bed.
Perhaps now there is a golden - or should I say green - opportunity for actuaries to get to grips with climate change and help explore innovative solutions.