In an era where climate change occupies the thoughts of many, independent insurance agents face a difficult task. Not only do they need to protect the interests of their clients, they also need to align their business practices with climate change goals. Whether these changes encompass going paperless, minimizing unnecessary risk, or allocating a certain percentage of dollars to climate-related non-profits, here are eight ways to leverage technology in fulfilling climate change commitments.
Use Digital Platforms
As climate risks and regulations continuously change, streamlining and automating can improve an insurer’s ability to “keep up with the times.” It can also help them stay efficient and cost-effective. These platforms and tools may include the following:
- Digital document management systems
- Electronic signature options
- Online portals for policy management, claims processing, and communication.
Digital platforms and tools can also help reduce paper usage, conserving resources and reducing the insurer’s (and the client’s) carbon footprint. ‘
Go Virtual for Client Meetings
Agents can also utilize video conferencing and online collaboration tools for hosting remote meetings with clients. This option reduces the need for travel and associated carbon emissions. Virtual meetings save time and travel costs but also reduce greenhouse gas emissions.
Assess Risks with Data Analytics
In 2021, property & casualty insurers paid nearly $90 billion in claims for catastrophic events to clients in the United States. Hurricane Ian cost insurers between $50 billion and $65 billion in 2022. But hurricanes aren’t the only climate-related property risk. There are also wildfires, flooding, and winter storms to consider. Predicting and preparing for these 100 catastrophic events may have been able to reduce the enormous payout.
Technology can be highly supportive in dealing with these increased risks. Utilizing data analytics can help insurers assess and predict climate- and weather-related risks via machine learning and artificial intelligence (AI). Some examples are online risk assessment tools, predictive modeling software options, and real-time weather data integration websites.
Analyzing historical data, weather patterns, and other relevant information can help agents better predict areas of heightened risk. With that information, they can provide tailored coverage to their clients. They can also help them determine the most effective risk management solutions for their circumstances. Supporting clients in proactively lower climate risks contributes to overall climate resilience for insurers.
Data analytics technology can also allow agents to model different scenarios. From there, insurers can determine their potential impact and associated costs. Based on this information, insurers may choose not to cover risks in some locations. They may also adjust pricing based on region or increase reinsurance in those areas.
Offer Green Insurance Products
Insurers may also use technology to develop and offer new “green” insurance products. Incentivizing and rewarding environmentally sustainable practices can encourage clients to make climate-friendly changes. Examples may include coverage for renewable energy installations, energy-efficient buildings, or eco-friendly transportation.
Technology may also help insurers accurately price new green product offerings, personalize offers, and reduce risk. Ultimately, it may improve the overall sustainability of the agency.
Empower Clients with Carbon Footprint Calculators
Agents may also provide clients with online carbon footprint calculators or tools that help them measure and understand their current environmental impact. These tools can enable clients to make informed decisions, adopt sustainable practices, and potentially qualify for insurance discounts or incentives based on their efforts to reduce emissions.
Embrace Remote Monitoring and Telematics
The emerging Internet of Things (IoT) can help insurers monitor and track risks associated with climate change. Telematics and remote monitoring devices like sensors can assist insurers in gathering data on environmental practices, performance, and even weather exposure of insured entities.
Sensors on buildings and other infrastructure can help detect early warning signs of damage from climate-related events, such as water damage, foundation deterioration, and the effects of rising temperatures on building materials.
These devices can also serve areas like fleet management, energy consumption, or waste management. The data collected can help agents offer customized risk management strategies and provide feedback to clients on their sustainability efforts.
Partner with Eco-Friendly Organizations
Collaborating with organizations dedicated to sustainability and climate action is another way to stand by climate commitments. By partnering with environmental NGOs, green initiatives, or sustainable businesses (even locally), independent insurance agents can be a part of the collective effort to combat climate change. It’s also an opportunity for insurers to offer specialized products or discounts to clients associated with these climate-related partnerships.
Get Involved in Climate Education
Independent agents can also use digital platforms, such as websites, social media, and email newsletters, to educate clients and the broader public about the importance of climate change mitigation. These platforms provide an excellent way to share information on sustainable practices, climate risks, and insurance solutions that can contribute to a more sustainable future.
In addition to the aforementioned practices, insurance agents should regularly review external data and gather client feedback regarding climate change-related measures. This information is valuable for identifying opportunities where technology can further support their climate change commitments. By harnessing technology effectively, independent insurance agents can fulfill their climate change commitments by promoting sustainability, providing customized solutions, and raising awareness among clients and the broader community.