The Impact of Climate Change on the Insurance Industry: Perceptions of Industry Experts and Corporate Responses

Abstract

The impact of climate change is posing substantial risks for contemporary businesses and individuals. In response, insurance companies are adapting old and adopting new strategies and practices. This study aims to identify operational and structural changes that insurance companies implement in response to risks posed by climate change. The overarching goal of this study is to understand the perceptions of industry experts about how climate change impacts the insurance industry, and identify corporate responses to the pressures stemming from climate change and the rising societal awareness of its impact. Using qualitative research methods, we gathered primary data from eight interviews with senior executives involved in sustainability initiatives within the insurance industry, along with secondary data on Singapore’s three largest insurance companies. Our findings indicate that industry experts view climate change as a significant external force influencing corporate strategies and operational frameworks. Further, insurance companies are investing in environmentally friendly businesses, changing product portfolios, and developing collaboration with administrative and regulatory bodies. Implications of these findings for managers and policymakers are discussed, along with directions for future research.