Matthew Hardy
Global Climate Practice Leader and Chief Underwriting Officer - Natural Resources, Chubb Overseas General
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We are in the critical decade for the transition toward net zero: investments in technology made between now and 2030 will set the trajectory for years to come and will determine whether the goals of the Paris agreement remain attainable. At the same time, nearly half of the technologies used in the International Energy Agency’s Net Zero Energy scenario between 2030 and 2050 are not yet in commercial use. This lays bare the challenge of the transition toward net zero: companies must simultaneously focus on the clearest, most immediate risks and opportunities related to climate change and the energy transition while also working to transform their organizations to develop and deploy new climate technologies.
A vital function of the insurance industry is to enable important projects to go forward—and perhaps no project has ever been more important than the global response to climate change. This response will require both that society develop and scale solutions for rapid decarbonization of the global economy and promote resilience to the physical impacts of change. At Chubb, we recognize that we have an important role in pioneering new risk solutions for our clients that will help them to both address the challenges of climate change and take advantage of the new opportunities arising from the transition toward net zero.
Chubb is committed to engaging with key stakeholders to ensure insurance policies provide appropriate coverage that keeps pace with the rapidly evolving hazards and client exposures because we understand the importance of having a contract that provides clear intent of coverage aligned with the exposure. Early engagement with all parties and Chubb’s proactive approach will catalyze this alignment between insurance contracts and the changing risk landscape.
Re-organizing for climate change
Recognizing that a comprehensive and forward-looking strategy to support our clients’ climate change needs will require new ways of working, we announced the launch of Chubb Climate+. Building on two decades of insuring renewable and alternative energy, extensive work with cleantech companies, and our traditional catastrophe expertise, Chubb Climate+ gathers our capabilities in a common structure for sharing knowledge across lines of business, technical specialties, industries, and the 54 countries and territories we operate in around the world.
Chubb Climate+ is designed for continued learning and growth as risks evolve and ideas move from whiteboards to reality. We worked with wind and solar power providers as advancing technology and greater scale drove the levelized cost of their electricity below that of coal in most locations. Now we aim to contribute as new innovative projects are being developed, such as lengthy undersea cables that connect renewable generation in one country to energy demand in another.
Enabling scale
Chubb is committed to supporting the transition toward a net-zero economy. We believe our role includes delivering risk solutions at scale and committing to new sectors—such as the many clean hydrogen facilities planned around the world—for the long term. Our global risk engineering and underwriting expertise is broadly applicable to supporting the net-zero transition and the range of new technologies that will be required, and we will provide this support through products ranging from construction to business interruption and catastrophe. And our global reach allows us to recognize common themes emerging with energy transition technologies around the world and apply our expertise to accelerate the transition.
One example of the transfer of our global expertise: we were part of a major offshore wind project in Europe and then used the same capabilities and knowledge to provide a tailored insurance solution for a similar offshore wind project in the U.S. Since the industry was nascent in the United States, it could be difficult to find suitable insurance and risk mitigation solutions for pioneers in this space.
Thanks to our combined expertise, Chubb Climate+ can help clients think more deeply about both the megatrends and the nuts-and-bolts aspects of adaptation and mitigation. The transition toward net zero will have some of the former and plenty of the latter. The journey can’t be mapped in any detail and is sure to have many twists and turns. We are committing the resources needed to anticipate challenges wherever possible, to share what we learn with our clients and travel the distance with them.