Creator of the award-winning Skeptical Science website John Cook and Associate Professor Kristen Lyons were among the shareholders attending the Suncorp AGM today in Brisbane, trying to find out why a company that is losing billions of dollars in climate change related damage is not doing anything about it. Suncorp is one of the largest insurance companies in Australia representing 3,500 employees and serves close to nine million customers.
Suncorp CEO Michael Cameron revealed a worrying lack of understanding of current climate science earlier this year when he erroneously said ‘”The extent of influence by humans is still difficult to quantify“. This comes after the ninth year in ten where Suncorp under-provisioned for natural disasters – in some part driven by climate change – which has cost the company over $2 billion more than expected.
John Cook sought to set the record straight, asking if Mr Cameron now agreed about the human influence on climate change:
Their acceptance and understanding of climate science generated a sigh of relief from shareholders and customers alike. But when it comes to how Suncorp was managing and responding to climate change, there were still some obvious gaps. Unlike their competitors IAG, Suncorp’s climate change position doesn’t support the Paris Climate Change agreement that is now on the verge of coming into legal force. Kristen Lyons pressed the Chairman, Ziggy Switkowski over the bank’s position on the 2ºC global warming limit. While Mr Zwitkowski talked at length about the importance of holding global warming to less than two degrees, he failed to commit to the goal.
Insurance companies in Australia could and should play a role in advocating for better climate policies. Large corporations have a disproportionate influence over government, but Suncorp claims that it doesn’t want to be a “campaigning” company. Despite the stark contrast in rhetoric around climate change between this year and last, Suncorp doesn’t see a role for itself in the debate on reducing carbon emissions. Rather, it’s focus is primarily on adaptation and mitigation – which is laudable but not the main game.
Chairman Ziggy Switkowski talked about the need to manage the impacts of climate change, and adequately pricing those risks but the fact that Suncorp has had another year where losses on extreme weather have exceeded their provisions suggests they still haven’t got it right. Here’s the Suncorp board being taken to task over their repeated failure to adequately provision for extreme weather costs:
While the insurance industry in Australia slowly realises how it needs to catch up, companies in the UK and Europe have understood the important role they can take to address climate change. The Bank of England Prudential Regulatory Authority released a report on ‘The Impact of climate change on the UK insurance sector.’ This report was endorsed by fifteen CEOs of various UK insurance companies, as they demanded action on climate change. This is understandable given the massive costs that climate change will cause to the industry, described by BoE Governor Mark Carney as “eye-watering”. According to the Australian Business Roundtable natural disasters are set to increase to $33 billion in Australia by the year 2050 – a more than three fold increase from the current $9 billion.
Further questioning about the role of the Insurance Council were batted away by Mr Switkowski. The Insurance Council of Australia – the peak representative body of insurers in Australia – still does not have a formal climate change policy. In 2016. It is also the body chiefly responsible for lobbying various levels of government on behalf of its members. Yet the chairman of Suncorp, one of its most significant members, didn’t want to talk about it.