November 27, 2020 by Adam Malik
Aviva Canada CEO Jason Storah has no time for arguing about the validity of climate change and the threats facing the planet that are affecting the insurance industry.
Instead of debates about climate change based on speculation and conjecture, he’d rather discuss data.
“Look, I’m being I am very conscious that I don’t really want to get dragged into an argument with people who have subjective or emotional views on, ‘Is climate change real? What causes climate change?’ There’s no value in that,” Storah said at KPMG’s virtual Insurance Conference. “What there is value in is pointing to the scientific data and saying, ‘We need to get ahead of this.’”
Storah’s keynote address was entitled, Climate change – Preparing for a Future of Increased Risk. He told Peter Doyle, associate partner, insurance at KPMG Canada, during a question and answer session that climate change is clearly having an impact on the insurance industry and its clients. Change is needed.
“It is not right to keep doing the same, or ignoring something,” he stressed.
These days, people are preoccupied with whom to trust and what to believe, Storah observed. With a global pandemic, and the rise of conspiracy theories peddled on social media, questioning of science and data has become more commonplace. It’s fine to challenge science, but listen to it, too, he said.
“Unfortunately, this year, when you look at a crisis like COVID and how it’s been handled by different countries around the world, the differing views, the alternative facts, whatever you want to call them,” he said, “I think the one thing for me that I hold quite true is there is value in following science. There’s value in challenging it, but there’s value in acting on it.”
Three or four decades ago, climate-related catastrophic loss was a small part of the insurance industry’s losses. Today, they account for much more. According to Insurance Bureau of Canada’s 2020 Facts guide, data reported by Catastrophe Indices and Quantification Inc. (CatIQ) shows that between 2010 and 2019, catastrophic losses crossed $1 billion in insured damages eight times. It had only reached that level twice from 1983 to 2009 (though IBC didn’t use CatIQ data until 2008).
Storah acknowledged population growth and related effects are contributing factors to climate change. But these things alone don’t offer provide a complete picture, he said. “Now buildings are more expensive, there’s more of them, there’s more people, there’s more cars on the road — I get all of those things. There’s lots of ways that you can split it, and you can explain away the impact of climate-related losses, but you can’t explain them away to zero.”
Bottom line, follow the numbers and the data, and listen and trust the science.
“So my point…is we have to follow the science,” Storah said. “And the great thing about science is it changes and evolves and it gets better. One of the things I’m really encouraged about in the scientific community is they actively want to be better. They want to know more. They want to do something quicker. They want to have better data. We should be following that.
“Just following anecdote and following bias and prejudice and subjective views doesn’t get us anywhere.”
Feature image by iStock.com/SIphotography