‘There is real value in insurers helping people get ahead’ of climate change-related risks – Aviva’s Adam Winslow

Insurers can provide “real value” to help customers “get ahead” of climate change-related perils, according to Adam Winslow, chief executive of UK general insurance at insurer Aviva.

Speaking exclusively to Insurance Times, Winslow noted that 2022 “saw most of the perils you could possibly imagine”, including three named storms in Q1, a summer heatwave that drove subsidence and fires, as well as fluctuating winter freezes and spells of warmth in Q4 which led to flooding incidents.

Although this varying succession of claim events left insurers’ spinning many plates when it came to risk management and accurate underwriting, Winslow still believes the sector has “a big role to play” in helping customers get ahead of the climate change curve.

He explained: “If you imagine that those aren’t one [off claims events] and climate change is accelerating all the time, how we respond to that, how we underwrite that, how we then help people prevent, mitigate, plan and prepare for those [events is really important] - I think there is a real value in insurers helping people get ahead of that.

“Frankly, insurance has a twofold responsibility here. If we can help people plan and prepare so that they don’t make a claim, great. If they do make a claim, if we can help them recover really quickly, great.

“A bit of focus, I think, goes a long way in terms of making sense of the role of the insurer and the role of the broker because they - of course - have a big role to play [here].”

Tapping into an ecosystem

For Winslow, data is an important part of the equation – for example, the use of tree data to better understand subsidence risk and avoid having to pose additional questions about vegetation to end customers.

“There’s a lot of data we and other insurers can bring into our pricing models and underwriting where we don’t have to ask end customers or end corporates, where we know the answers and can [then] adjust our prices accordingly,” Winslow said.

“There’s a lot that can be covered as a consequence [of using this type of data, a lot that can be] well assessed and well priced as a consequence of the data that’s available in the market.

“Then the question is how quickly can that data be ingested? And how quickly can systems and processes be enriched?”

In addition to the use of data, Winslow noted that the sector’s role in insuring the UK’s transition to net zero carbon dioxide emissions is “probably going to be another big focus for this year”.

Despite these positive trends, Winslow observed that there is still an “underlying risk” around global warming-related weather events – even if “insurers and end clients try and do everything right”.

He cited flood defences as an example, noting that this is an area where the government has to become more involved, or government-backed reinsurance scheme Flood Re will need to change its parameters to include commercial buildings and properties built post-2009.

Winslow continued: “There are definitely areas where it won’t just simply be down to the insurer or the broker or the end customer - you have to think about it as a broader ecosystem, which includes the government.

“Flood defences aren’t going to be something that we can ask an end customer, a corporate, a broker or an insurer to pay for in isolation. It’s got to be part industry, part government.

“There’s good opportunity [for the industry to cover climate linked risks], but I’m not sure we’ve got all the answers to all of the perils.”

Growth of renewable footprint

One area Aviva is dabbling in more is renewable energy. “We are looking at extending [our] renewables footprint all the time,” Winslow confirmed.

He continued: “Our primary focus up until now has been onshore wind, solar and battery storage.” The insurer additionally entered the offshore wind market in January 2023.

However, Aviva is also now homing in on insuring electric vehicles (EVs) and EV charging networks.

Winslow said: “As more and more cars that are being bought are EVs, we need to be able to underwrite them, but also there needs to be the network of chargers so people can actually undertake the journeys they want without it taking a fortnight to get to their destination or home.”

With this in mind, Aviva “announced a number of extensions last year” around “battery storage and EV charge points”. For example, in September 2022, Aviva launched standalone insurance products aimed at installers and operators which covered EV charging points.

Winslow continued: “We have to be there for people - whether that’s corporates or [individual] customers. That’s our role as an insurer.

“We’re very mindful of how the power mix is changing in the country and how consumers are living their lives and what they’re conscious of.”