Earth Day: An annual call to action for the insurance industry

My team and I closed the May 2021 issue of NU Property & Casualty magazine just ahead of Earth Day, the annual event developed more than a half-century ago to raise awareness of environmental protection initiatives and the peace movement.

It would be glorious to be able to write that the world has come a long way since that first Earth Day observance in 1970. But sadly, violence and social unrest continue to grip my country, and the Earth itself is in worse shape than it was 50 years ago.

Consider, for instance, some of the horrifying statistics highlighted in the recent Netflix documentary, “Seaspiracy,” a film that takes aim at the commercial fishing industry for its contribution to the planet’s water sickness. Viewers of the controversial documentary get an eyeful of the Great Pacific Garbage Patch, or the floating mass of plastics between Hawaii and California that’s three times the size of France. Commercial fishing nets make up a notable percentage of this trash in the ocean. Commercial fishing also is responsible for the killing each year of millions of sharks, which are essential to the oceanic ecosystem and therefore necessary for the health of our planet. Whales, dolphins and seals also are victims of commercial fishing bycatch, meaning they are collateral damage of humanity’s love of crab cakes, sushi, scampi and the like.

While such grand ecological problems may seem disparate from the work of everyday insurance agents, brokers, risk managers and executives, the insurance industry has a huge role to play in environmental stewardship. Sarah Wirtz and Samantha D’Amico from Risk Placement Services write that agents and brokers must illuminate the need for environmental insurance for their commercial clients, particularly those involved in product manufacturing and distribution. They offer a five-point argument for why such coverage is now essential to manufacturing businesses.

And Los Angeles underwriter Preston Nanney argues that the insurance industry still struggles to come to terms with the climate crisis, despite the fact that natural catastrophe losses continue to rise and show no sign of subsiding. Nanney makes the astute observation that the insurance industry, which was already widely misunderstood, now faces an unprecedented reputation crisis due to the denial of COVID-19 business interruption claims and subsequent lawsuits. The industry could begin to overcome this image problem by getting behind wide-scale environmental protection initiatives.

One of the best insurance stories, and a paramount example of the positive impact insurance can have on society, is that of Benjamin Franklin and The Philadelphia Contributionship, the oldest insurance company in the U.S. In 1730, a blaze described as “the most disastrous fire to rage in Philadelphia’s history” destroyed businesses and homes near the Delaware River. Franklin commented in the local press that had people in the affected area been equipped with firefighting gear, the flames and subsequent damage could have been easily contained. “An ounce of prevention is worth a pound of cure,” he famously said. Franklin and his colleagues established the city’s first organized group of firefighters and then founded The Philadelphia Contributionship for the Insuring of Houses from Loss by Fire so that fire victims could more easily recover from catastrophe.

Now, the climate crisis is on track to become the most far-reaching and catastrophic disasters the Earth has ever known. It will take more than a single initiative to curtail. But no sector is better-suited to fuse science, economics and political muscle to devise lasting, proactive solutions than the insurance industry.

Keep reading:

• How insurance is being called to lead in the climate crisis
• Wildfires, disease and the need for insurance-industry leadership
• Climate change challenges insurers to think beyond risk transfer