<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; line-break: after-white-space;" class=""><div style="color: rgb(34, 34, 34); font-variant-ligatures: normal; orphans: 2; widows: 2; background-color: rgb(255, 255, 255);" class="">Excerpts: "<span style="color: rgb(68, 68, 68);" class="">There is a lot more we can do, particularly in taking that insurance knowledge and using it to support other financial services. Banks do not take into account their aggregation of exposure and risk at the moment, because they have got insurance as a safety net. So, if insurance was not there, what would they fall back on?</span></div><p style="font-variant-ligatures: normal; orphans: 2; widows: 2; margin: 0px 0px 10px; padding: 0px; line-height: 18px; color: rgb(68, 68, 68); background-color: rgb(255, 255, 255);" class=""><strong style="margin: 0px; padding: 0px;" class=""><br class=""></strong></p><p style="font-variant-ligatures: normal; orphans: 2; widows: 2; margin: 0px 0px 10px; padding: 0px; line-height: 18px; color: rgb(68, 68, 68); background-color: rgb(255, 255, 255);" class=""><strong style="margin: 0px; padding: 0px;" class="">"Tom Herbstein:</strong> It is a crucial point: we talk about the split between the underwriting and asset management side of the insurance industry, but you can also say the financial services sector as a whole does not work as closely as it should. The more we understand the <b class="">systemic exposure of the financial system,</b> the more conversations will start.</p><p style="font-variant-ligatures: normal; orphans: 2; widows: 2; margin: 0px 0px 10px; padding: 0px; line-height: 18px; color: rgb(68, 68, 68); background-color: rgb(255, 255, 255);" class="">"A recent example of work in this area is ClimateWise's physical climate risk project. It is running banks' geo-coded mortgage portfolios through insurer climate models to highlight future geographic concentrations of climate risk.</p><p style="font-variant-ligatures: normal; orphans: 2; widows: 2; margin: 0px 0px 10px; padding: 0px; line-height: 18px; color: rgb(68, 68, 68); background-color: rgb(255, 255, 255);" class=""><strong style="margin: 0px; padding: 0px;" class="">"Otto Bedford:</strong> There are some fairly obvious direct exposures: for example, if property blows down in a hurricane, there is a clear route to accumulation of financial loss. When you look wider, as in the potential for a really bad cat event leading to a wider economic downturn – which actually would have a more pervasive impact across your investment portfolio – it's much harder, as there is no data on a massive catastrophe in the modern economy to calibrate to."</p><div style="color: rgb(34, 34, 34); font-variant-ligatures: normal; orphans: 2; widows: 2; background-color: rgb(255, 255, 255);" class=""><br class=""></div><div style="color: rgb(34, 34, 34); font-variant-ligatures: normal; orphans: 2; widows: 2; background-color: rgb(255, 255, 255);" class="">"<strong style="margin: 0px; padding: 0px; color: rgb(68, 68, 68); font-variant-ligatures: normal;" class="">Michael Lewis:</strong><span style="color: rgb(68, 68, 68); font-variant-ligatures: normal;" class=""> Work on the physical side of climate has really taken a massive leap forward in the last two or three years. <b class="">We have a situation now where investors know more about the physical climate risks of the companies than the companies themselves</b>. We can tilt portfolios towards more resilient companies when it comes to transition and physical climate risk."</span></div><div style="color: rgb(34, 34, 34); font-variant-ligatures: normal; orphans: 2; widows: 2; background-color: rgb(255, 255, 255);" class=""><br class=""></div><div style="color: rgb(34, 34, 34); font-variant-ligatures: normal; orphans: 2; widows: 2; background-color: rgb(255, 255, 255);" class="">"<strong style="color: rgb(68, 68, 68); margin: 0px; padding: 0px;" class="">Tom Herbstein:</strong><span style="color: rgb(68, 68, 68);" class=""> We were involved in a project in South Africa about 10 years ago, looking at the drivers of climate loss in the local environment. The study found that in most instances, over 50% of the loss was driven by </span><em style="color: rgb(68, 68, 68); margin: 0px; padding: 0px;" class="">proximate</em><span style="color: rgb(68, 68, 68);" class=""> drivers of risk, for example man-made changes to local ecosystems.</span></div><p style="font-variant-ligatures: normal; orphans: 2; widows: 2; margin: 0px 0px 10px; padding: 0px; line-height: 18px; color: rgb(68, 68, 68); background-color: rgb(255, 255, 255);" class="">For example, it was found that the drivers behind the flooding of a coastal town was not increased rainfall but instead deforestation and the mismanagement of the local estuary mouth that was allowed to clog up. This highlights the value of risk mitigation or resilience in helping to manage exposure.</p><div style="color: rgb(34, 34, 34); font-variant-ligatures: normal; orphans: 2; widows: 2; background-color: rgb(255, 255, 255);" class=""><a href="https://www.insuranceassetrisk.com/content/roundtables/physical-risks/managing-climate-risk-in-underwriting-and-investing.html" target="_blank" data-saferedirecturl="https://www.google.com/url?hl=en&q=https://www.insuranceassetrisk.com/content/roundtables/physical-risks/managing-climate-risk-in-underwriting-and-investing.html&source=gmail&ust=1533397175660000&usg=AFQjCNFFMoAVyU1cXZsnFUtFxd_y1SrpvA" style="color: rgb(17, 85, 204);" class="">https://www.<wbr class="">insuranceassetrisk.com/<wbr class="">content/roundtables/physical-<wbr class="">risks/managing-climate-risk-<wbr class="">in-underwriting-and-investing.<wbr class="">html</a></div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8px; font-variant-ligatures: normal; orphans: 2; widows: 2; background-color: rgb(255, 255, 255);" class=""><br class=""></div><div class="">
<div dir="auto" style="color: rgb(0, 0, 0); letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px; -webkit-text-stroke-width: 0px; word-wrap: break-word; -webkit-nbsp-mode: space; line-break: after-white-space;" class=""><div dir="auto" style="word-wrap: break-word; -webkit-nbsp-mode: space; line-break: after-white-space;" class=""><div style="color: rgb(0, 0, 0); font-family: Verdana; font-size: 14px; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px; -webkit-text-stroke-width: 0px;"><div style="margin: 0px; font-stretch: normal; font-size: 12px; line-height: normal;" class="">*******************************************************************</div><div style="margin: 0px; font-stretch: normal; font-size: 12px; line-height: normal;" class=""><span style="-webkit-font-kerning: none;" class="">“The climate scientist James Hansen has called two-degree warming “a prescription for long-term disaster.” Long-term disaster is now the best-case scenario. ... Robert Watson, a former director of the United Nations Intergovernmental Panel on Climate Change, has argued that three-degree warming is the realistic minimum. Four degrees: Europe in permanent drought; vast areas of China, India and Bangladesh claimed by desert; … ; the American Southwest largely uninhabitable. The prospect of a five-degree warming has prompted some of the world’s leading climate scientists to warn of the end of human civilization.</span></div><div style="margin: 0px; font-stretch: normal; font-size: 12px; line-height: normal; min-height: 15px;" class=""><span style="-webkit-font-kerning: none;" class=""></span><br class=""></div><div style="margin: 0px; font-stretch: normal; font-size: 12px; line-height: normal;" class=""><span style="-webkit-font-kerning: none;" class="">“Is it a comfort or a curse, the knowledge that we could have avoided all this?”</span></div><div style="margin: 0px; font-stretch: normal; font-size: 12px; line-height: normal; min-height: 15px;" class=""><br class=""></div><div style="margin: 0px; font-stretch: normal; font-size: 12px; line-height: normal; color: rgb(34, 34, 34); -webkit-text-stroke-width: initial; -webkit-text-stroke-color: rgb(34, 34, 34);" class=""><span style="-webkit-font-kerning: none; background-color: rgb(255, 255, 255);" class="">New York Times Magazine August 1, 2018</span></div><div style="margin: 0px; font-stretch: normal; line-height: normal; color: rgb(34, 34, 34); -webkit-text-stroke-width: initial; -webkit-text-stroke-color: rgb(34, 34, 34); background-color: rgb(255, 255, 255);" class=""><span style="-webkit-font-kerning: none;" class=""><b class="">Losing Earth: The Decade We Almost Stopped Climate Change</b></span></div><div style="margin: 0px; font-stretch: normal; font-size: 12px; line-height: normal; -webkit-text-stroke-width: initial; -webkit-text-stroke-color: rgb(34, 34, 34); background-color: rgb(255, 255, 255);" class=""><span style="-webkit-font-kerning: none;" class="">We knew everything we needed to know, and nothing stood in our way. Nothing — except ourselves. A tragedy in two acts.</span></div><div style="margin: 0px; font-stretch: normal; font-size: 12px; line-height: normal; color: rgb(34, 34, 34); -webkit-text-stroke-width: initial; -webkit-text-stroke-color: rgb(34, 34, 34); background-color: rgb(255, 255, 255); min-height: 15px;" class=""><span style="-webkit-font-kerning: none;" class=""></span><br class=""></div><div style="margin: 0px; font-stretch: normal; font-size: 12px; line-height: normal; color: rgb(17, 85, 204); -webkit-text-stroke-width: initial; -webkit-text-stroke-color: rgb(17, 85, 204); background-color: rgb(255, 255, 255);" class=""><span style="-webkit-font-kerning: none; color: rgb(34, 34, 34); -webkit-text-stroke-color: rgb(34, 34, 34);" class=""><<<a href="https://www.nytimes.com/interactive/2018/08/01/magazine/climate-change-losing-earth.html" class=""><span style="-webkit-font-kerning: none; color: rgb(17, 85, 204); -webkit-text-stroke-color: rgb(17, 85, 204);" class="">https://www.nytimes.com/interactive/2018/08/01/magazine/climate-change-losing-earth.html</span></a>>></span></div><div style="margin: 0px; font-stretch: normal; font-size: 12px; line-height: normal; color: rgb(34, 34, 34); -webkit-text-stroke-width: initial; -webkit-text-stroke-color: rgb(34, 34, 34); min-height: 15px;" class=""><span style="-webkit-font-kerning: none;" class=""></span><br class=""></div><div style="margin: 0px; font-stretch: normal; font-size: 12px; line-height: normal; -webkit-text-stroke-width: initial; -webkit-text-stroke-color: rgb(0, 0, 0);" class=""><br class=""></div></div></div></div><br class="Apple-interchange-newline"><br class="Apple-interchange-newline">
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