In its response to provinces calling for commentary on various adaptation strategies and discussion papers, the Canadian Life and Health Insurance Association (CLHIA) says the immediate impact of climate change – more frequent and severe storm, flooding, drought and forest fires – is obvious to property and casualty insurers, but says life and health insurers are also closely watching the impact of climate change on mortality, morbidity, public health, people’s livelihoods and inequality. 

“Increased data assessing which communities face climate-related risks, whether due to extreme weather events or demographic factors, would be useful in understanding whether certain regions or populations have a life and health insurance protection gap that could worsen with climate change,” they write in a submission commenting on British Columbia’s draft climate adaptation and preparedness strategy. 

Sustainable products and assets 

“At the same time, as a substantial long-term investor in the Canadian economy, the life and health insurance industry can play an important role in supporting Canada’s transition to a lower carbon economy. Canadian life and health insurers already have more than $75-billion invested in sustainable products and assets. With the appropriate regulatory conditions, the industry can act as important partner to governments in addressing climate change and promoting resilience.”

They add that the life and health insurance industry is well positioned to support the transition with investment in sustainable infrastructure projects. “The industry is available to collaborate with the government on the issue of lack of supply of sustainable assets for investment, such as infrastructure, clean electricity generation and climate transition projects,” they write.

Pointing to the investment needed in public transit, roads, hospitals and schools, in addition to the investment needed in renewable energy projects and nature-based solutions to cut emissions, they say Canadian life insurers are a leading source of long-term financing for infrastructure development and redevelopment, having participated in projects ranging from roadway building and public transit to wastewater systems. In 2019 they say life and health insurers had more than $52-billion invested in domestic infrastructure.

Ideal financial partners 

“Because life insurers can commit to long-term financing throughout the design, build, maintain and operate stages, they are ideal financial partners for public-private partnership infrastructure projects,” the paper states. “Given that the bulk of Canada’s $400-billion infrastructure deficit is at the smaller municipal government level, a more nuanced approach is needed to address this specific segment of the country’s infrastructure deficit. Active collaboration between all levels of government and the private sector to develop a comprehensive, long-term plan to fund and facilitate identified needs at the local level will help speed projects to market and reduce the infrastructure deficit.” 

They conclude: “We recommend the government leverage our industry’s investment capacity to expand and accelerate long-term infrastructure projects,” they write. “We would encourage the government to develop government policies and bring forward regulations to encourage private investment in infrastructure.” 

This report was first published in the December 2021 issue of the Insurance Journal