| | 9CIOReviewJUNE 2024factors, understand how these factors can affect operations and business strategy, anticipate threats and leverage opportunities.But how does this impact the company's insurance?According to Swiss Re's 2022 Sigma report, global losses resulting from natural disasters were approximately US$275 billion of which 45% were compensated by insurance, the year 2023 was again characterized by extreme insured losses. The number of losses in natural disasters was US$ 250 billion with 38% of this amount being covered by insurance. This is equivalent to an average annual increase of 5% to 7% in insured losses over the last 3 decades. It is interesting to note that, unlike in 2022, in which Hurricane Ian impacted around US$ 100 billion of global losses, in 2023 statistics indicate losses characterized by severe regional storms. In North America, around US$ 66 billion was lost due to climate factors, of which US$50 billion was insured. In Europe, the value was US$10 billion, of which US$8 billion was covered by insurance. With around 74 thousand deaths, 2023 was the deadliest year in natural disasters since 2010, well above the annual average of the last five years which was 10 thousand. 76% of economic losses caused by natural disasters are related to climate, while 24 % had geophysical causes, such as earthquakes. For example, one of the main causes of the worsening of climate disasters is the increase in temperature. Around the world, average temperatures until November were around 1.3°C higher than in pre-industrial times (1850-1900), making the year 2023, the hottest since temperatures have been measured. Global warming intensifies extreme weather conditions, causing a significant increase in losses, forcing society and industry to better understand the evolution of risks and what actions must be taken to control them, making risk analysis a key factor in the insurance market.Concern with sustainability and environmental practices is nothing new but with the signing of the Paris Agreement in 2015. It definitively entered the financial market agenda globally, mainly emphasizing climate risks and their potential impacts on the stability of the financial system. Globally, the insurance market has adopted standards requiring insurers and reinsurers to implement ESG factors in sustainability policies and the risk management structure and operational processes of their pricing and underwriting areas, establishing limits for risk concentration or restrictions for conducting business. Insurers are being pressured to act decisively in preventing their risks, being meticulous in the details of the risks, as a consequence, they are increasingly demanding from their clients to align ESG practices, focusing mainly on environmental and climate issues. Analyzing how companies have adopted ESG criteria to avoid any problems that their activity may cause to the environment and third parties, some insurance companies are even restricting their portfolio by measuring companies' carbon footprint. Companies that follow the requirements, in addition to impacting the world with actions to improve the environment and climate, may also have a reduction in the rates applied to their policies, bringing significant financial savings to the business.The analysis is simple and clear: the higher the lack of climate control, the higher the chances of catastrophic events and the higher is going to be the loss with compensation from insurance companies. Thus, ensuring the implementation of ESG criteria in a company's risk management, controls risks, bringing financial security and tranquility to the business. It minimizes impacts on the environment and global climate change, guaranteeing improvements to the world climate and financial savings, reduction of fees, ease of acceptance of risks and breadth coverage when contracting insurance policies. Ensuring the implementation of ESG criteria in a company's risk management, controls risks, bringing financial security and tranquility to the business
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