‘Polycrisis’ presents UK insurers with an opportunity to be ‘impactful’ – Axa UK and Ireland

Insurers have a “significant” and “impactful” role to play in mitigating some of the biggest threats to homes and businesses, according to Tara Foley, chief executive at Axa UK and Ireland.

Speaking at the Insurance Innovators Summit on 5 November 2024, Foley identified climate change and the transition to a net zero economy as one example of a key industry-wide challenge insurers must engage with.

She said: “In terms of [insurers’] role [tackling such challenges], I believe it is significant – it can and should be impactful.

“What we do is manage risk and risk affects everything and every aspect of life.

“As a company, we have just released our Future Risks Report 2024 and one of the biggest concerns is the risk of conflict and the ripple effect it can have.

“I believe it is right that we play a role in raising transparency and our understanding of these risks.

“We face an environment where there is a polycrisis and with it, complex and interconnected risks.

“We have the ability to strip back that complexity and understand the risks better and allow ourselves and other stakeholders to make better decisions.”

Data update

Foley told delegates that she had been in contact with her opposite number in Spain – the country’s south eastern regions faced heavy flooding last month (October 2024), leading to allegations that the authorities were aware of the storm threat, but had not given the population sufficient warning or advice to protect both life and property.

“We look at the devastating events in Spain and we should not be arrogant to think that this won’t happen to us,” she explained.

“We need to look at our models and the data we put into them. In the past, we have relied on data which is becoming less reflective of the threats we face today.”

Foley added that Axa UK and Ireland had sought to engage with the Labour government before it came to power in July 2024.

“We believe that resilience is vital,” she said. “Before the election, we spoke to the Labour party and sought to see the appointment of a minister for resilience.”

Speaking on the government’s plans for a surge in new homes over the next five years, Foley struck a tone of caution, however.

“Where and how we build those houses will be critical to future insurability,” she said.

Insurers putting ‘money where our mouths are’

Jason Storah, UK and Ireland general insurance chief executive at Aviva, added: “Insurers have the ability to lead on climate change, but we cannot do it alone. We need to engage with the government.”

He continued: “In the past 10 years, we have seen one in every 13 homes built in high risk flood areas. It does not sound like a recipe for success.

“We have to engage with the government and other stakeholders to ensure that we are working towards common goals.”

Storah added that Aviva was spending money on a number of environmental projects that will protect properties and said that insurers needed to look to better leverage their finances.

“It is about where and how insurers are spending their money,” he explained. “It is important that we engage on these collective goals, but we also need to put our money where our mouths are.”