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The National Association of Insurance Commissioners released the report calling out measures to adapt to and deal with the risks posted by climate change.

The report, , notes that the NAIC and state insurance regulators are addressing climate-related risks through the three main pillars of insurance regulation: financial risk analysis; insurance market availability and affordability; and consumer education and outreach.

The report summarizes programs and actions by the NAIC and state insurance regulators to help the insurance industry respond to increasing natural hazards like flooding, wildfires and extreme weather.

“State insurance regulators are on the front lines of climate-related natural catastrophe preparedness and response, protecting policyholders and maintaining well-functioning insurance markets,” the report states.

The initiatives outlined in the report focus on five main areas:

• Measuring the financial impact of climate related risks
• Identifying how carriers are managing their climate risks
• Focusing on mitigation as a way to reduce the protection gap
• Increasing consumer and stakeholder awareness
• Engaging in domestic and international partnerships

Consumer Groups and FIO

A group of consumer organizations are urging the Federal Insurance Office to take a leadership role in guiding the industry toward a net zero emissions goal and increasing protections for consumers facing more dangerous extreme weather and escalating insurance premiums.

The Consumer Federation of America, the Center for Economic Justice, the Maryland Consumer Rights Coalition and Consumer Federation of California submitted comments addressing how FIO can engage issues of rising insurance costs, decreasing coverage availability, the vulnerabilities of communities of color and lower-income consumers, and how insurers both contribute to and can combat climate change.

The group’s comments were in response to an FIO request for information on insurance and climate risk.

“Avoiding cataclysmic results requires the global community, and highly industrialized nations particularly, to make dramatic changes that will both reduce long-run exposure to climate risk and improve resiliency in the face of persistent near-and medium-term risks. The insurance sector is central to effectuating those responses,” the consumer organizations wrote.

The group in its comments argues that companies that provide insurance coverage for the industrial activities most directly responsible for global warming, like coal-powered plants, or that support those activities through investments, are partly responsible for the impacts of climate change.

“The insurance industry is, in essence, down-streaming the burden of climate-change from the firms that create it to the communities that suffer under it,” the groups stated.

Extreme Temperature Insurance

A technology firm and a managing general agent are partnering to offer extreme temperature insurance to commercial properties across the U.S.

The extreme temperature coverage is parametric, with claims directly linked to temperature, according to Vave, an algorithmic underwriting MGA, and The Demex Group, a climate risk analytics and technology firm. When the temperature passes a predefined threshold – for example, below 20°F in winter – a claim is immediately triggered, the Insurance Journal reported in an article on Wednesday.

Small-to-medium business owners can lose revenue and face higher utility, operating, and supplier costs from climate change driving increased extreme weather, including harsh winter cold snaps and summer heat waves, the firms say.

The claim amount corresponds to the severity of the event, with more extreme events driving larger losses and leading to higher claim payments. Vave’s extreme temperature insurance is designed to provide up to $1,000 of immediate cash during intense temperature events.

Vave’s Robert Porter said the addition of Demex parametric weather cover to Vave’s commercial property product will “give small businesses increased peace of mind that they can continue to operate following extreme weather.”

Neptune Flood

Neptune Flood, an AI-driven insurance company, announced it will help combat climate change within the company and it called on the insurtech sector to become the first entire industry to achieve carbon neutrality.

“As a young industry, we have the unique opportunity to be the first that is carbon neutral. Insuretech positively impacts insurance through innovation – let’s now apply that same innovation to positively impact our planet,” Trevor Burgess, CEO of Neptune Flood, said in a statement.

Neptune Flood has a four-step plan in partnership with leaders in each vertical:

Offset the corporate carbon footprint: Neptune committed to offset its corporate carbon footprint annually, including all office and travel related impact.

Offset the carbon footprint of employees: Neptune is planning to mitigate the carbon footprint of its 36 employees via a partnership with One Tree Planted, a global reforestation nonprofit. This initiative will plant 720 trees in Neptune’s home state of Florida, and each year Neptune will purchase an additional 20 trees for every incremental employee.

Commit to community projects: Neptune is helping with coastal resiliency and has made its first donation of $50,000 to Tampa Bay Watch, specifically to the group’s oyster habitat program. Oyster reefs are said to help protect from erosion during storm events. Neptune team members also have paid time-off to volunteer with Tampa Bay Watch.

Offer resilience-building products and services: Neptune’s Jumpstart parametric team is working on additional climate-based insurance products to add to Neptune’s flood insurance offering with a goal of improving climate-effected resiliency across the economic spectrum.

Past columns:

• Reports from U.S.-based Group Will Examine Impacts of Climate Change on Terrorism
• California Releases Climate Draft Plan, Axis Accelerates Retreat from Coal
• Report: A Fifth of U.S. Insurance Company Board Members Have Worked in Fossil Fuel Industry
• Insurance Regulator Hosting Another Climate Summit
• Zurich and Swiss Re Leaning Even Greener, While Gen Zers Covet Climate Jobs