Climate change as a challenge to China’s insurance industry

Abstract

Purpose – This paper aims to examine the risks caused by recent climate change in China and their effects on the insurance industry. China has experienced more extreme events (floods, droughts and storms) in recent years than ever before, causing the insurance industry to pay increasing attention to the negative consequences of climate change. Design/methodology/approach – This paper reports on the frequency and severity of extreme risks caused by climate change. It examines what Chinese insurers are doing to address climate change risks and discusses opportunities for expanding their role in providing relief against natural disasters. Findings – Being professional risk managers, Chinese insurance companies need to identify and assess the impacts of climate change to play a more prominent role in a market offering great future opportunity. Originality/value – The Chinese insurance industry has not been actively involved in the management of increasing risks due to climate change. This paper will discuss the reason for this limited involvement and the ways for the insurance industry to overcome obstacles, enabling it to capitalize on future opportunities.