Energy-Efficiency Option for Insurance Loss Prevention

Panel: Panel 4: Human dimensions of energy use and efficiency

Authors:
Evan Mills, Center for Building Science, Lawrence Berkeley National Laboratory
Ivo Knoepfel, Climate Change Advisor Swiss Reinsurance Company, Zurich, Switzerland

Abstract

This paper argues that the insurance industry should support efforts to identify, improve and implement ?no-regrets? energy-efficiency options that would both reduce near-term business risks caused by insured losses while making a considerable contribution to long-term reductions in greenhouse-gas emissions which also threaten their bottom line. The short-term risk-reducing benefits would have distinct value to insurance companies and their customers irrespective of the timing or extent of future damages related to global climate change.

Our central recommendation is that the international insurance industry initiate a systematic activity to (a) identify technologies that contribute both to traditional loss-prevention and to reducing greenhouse-gas emissions, (b) promote the dissemination of information and the utilisation of such technologies in the cases where they have proven to contribute to loss prevention and are commercially available, e.g. ?leading by example? by implementing in-house energy management programs in their own building stock, and (c) support research, development, and commercialization where promising technologies are not yet available in the marketplace. Once the loss-prevention benefits are sufficiently demonstrated, insurers can promote the use of the corresponding technologies and strategies by introducing risk-adequate insurance premium schemes.