Non-life insurance necessarily involves dealing with the effects of climate change, since it includes cover for environmental and weather-related risks. Insurers offer that cover to policyholders on the basis of their vast knowledge of the risks related to extreme weather events and their expertise in measuring, modelling and pricing weather-related risks.
What is more, insurers can — and do — use their underwriting approach to motivate policyholders to reduce their risks by investing in adaptation and prevention measures or to reduce their carbon footprints by opting for green/energy-efficient alternatives. They do this through risk-based insurance premiums; excesses or deductibles; requiring certain prevention measures as a condition of a policy; and other policy terms and conditions.
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