The role of young insurance professionals in mitigating the effects of climate change risk in Africa

The insurance industry plays a three-fold role in sustainable development:

• First is the conventional insurance role of transferring risk and financial risk management. Through this, insurers help individuals and businesses to reduce and transfer risk.
• Secondly is the risk manager role of abating physical risks and their effects. This makes insurers to be an enabler of economic and provide resilience and financial security.
• Thirdly is the very important investor role. By channelling assets towards sustainable investments, insurers are able to promote sustainability across different asset classes and geographies.

Climate change is not an emerging risk, that was the case 30 years ago. We are now in a climate emergency. So, let me remind us of a few things about this climate change crisis:

Climate change is an interconnected issue. It spans different areas, from human rights that are abused to the physical environment that is destroyed. The vulnerability at hand is not just from exposure to the effects of climate change but also the political, social, and economic factors that either: 1) heighten sensitivity to climate change impacts or 2) limit our ability to mitigate the effects and adapt to climate change.

Secondly, climate change is an intergenerational justice issue. The physical effects of climate change that have already materialised have laid bare the vulnerability of future unborn generations. It has exposed the disproportionate effects borne by women and children, and the threat to climate justice for most vulnerable populations. Gender and intergenerational equity will always be core components of the climate challenge.

It is therefore clear that climate change is a social, gender, economic, political, justice, and generational issue not just for its consequences but also given its causes. And also, not forgetting that climate change is highly intertwined with inequality – be it gender inequality, income inequality, or the inequality of opportunities. And many of us young people are increasingly becoming conscious of these inequalities around us as we get to see the world for what it really is and not a naïve view of what we perhaps imagined the world to be.

There is therefore not much convincing needed that addressing climate change will require systemic changes and not just quick-fix interventions. Systemic changes at all levels – be it government, private sector including insurers and reinsurers like yourselves, and even development finance institutions.

Given the threat from missing the Paris goal of limiting global warming to well below 2°C and pursuing 1.5°C, this places the hard work of climate action act right in our hands. It is an obligation. An obligation we cannot escape.

And so as we think about our role as young professionals in mitigating these effects of climate change risk in Africa, I invite us to consider three pieces of advice:

• Be interested in the science of climate change

Through my time working in the climate risk and sustainability space, I have learned that in order to effectively contribute to climate action and sustainable development, you really have to be interested in the science. A lot of people really want the glamour that comes with working in this space – the big talk, the big conferences and the travel. But many of them do not in a proportionate manner care about the science. Caring about the science of climate change and what needs to be done for both mitigation and adaptation is critical to the process of building knowledge, connecting the dots, and building credibility.

When is the last time you read a climate-related book or a climate change post that goes into the science? It could be the science of carbon capture, or electric mobility, or green hydrogen, or how forests and oceans act as carbon sinks. Or how the current 1.3°C warming was determined. Or how net-zero targeted is calculated. Whatever you do, be interested in the science.

• Secondly, embrace the challenge

Working on the topics of climate action and sustainable insurance is a new area and a new challenge for many people, unlike traditional insurance practice or even in banking when I speak to banking colleagues. To be useful in this space, embrace the challenge that comes with the new knowledge you need to acquire. I have realised that it helps to build a community of people with similar interests. It could be as simply as attending a conference such as this or following people on LinkedIn or Twitter who write on the topic.

My own interest in this field was born at a conference. Years ago, as I worked as a consultant at McKinsey, I took a week’s leave to attend an SDGs conference in Singapore. It was my first time at a sustainability-themed event. This conference, called UNLEASH, brought together young leaders to work on SDG solutions. As different groups presented their ideas, I noticed a trend: many groups had wonderful ideas on how to innovate and solve different SDG issues, but very few of them talked about the finance aspects and commercial viability of the ideas. Being a believer in the power of markets, the question of financing really bugged me. And that is where the desire to work at the intersection finance and sustainability was born.

I did not figure it all at the conference, but the seed had been planted and that desire has grown over time and now, many years later, my work at UNEP FI revolves around working with banks, insurers and other financial institutions to embed sustainability in business strategy and operations.

As you embrace opportunities, leverage social media and professional networks. Use them for good. Personally, social media and conferences have helped me a lot to build a community over the years and to share knowledge online. In fact, my biggest audience of what I write on sustainability is on social media.

And so, I reiterate my challenge to all young professionals:

One, be interested in the science,

Two, embrace the challenge of scouting for opportunities,

• Thirdly and finally, I will say to you: connect the dots and seek where the future is. Let me repeat connect the dots and seek where the future is.

One of my favourite quotes is by the fiction writer, William Gibson. This is what he said, and I quote:

“The future is already here, it’s just not very evenly distributed”

A lot of the future we talk about is already happening elsewhere. It is the same with computers. Long before computers became mainstream or were even known, 15-year-old Bill Gates and his friend Paul Allen were already writing software programs at Lakeside prep school in the 70s. Long before we quantified the threat of climate change, small island developing states like Barbados and island cities like Venice were already feeling the heat, but now in a literal sense.

Long before net-zero insurance becomes mainstream in Africa, the likes of ICEA Lion Insurance Holdings have already joined the Net-Zero Insurance Alliance and are on their way to set net-zero targets. The future of climate action in Africa is already happening. Seek to find out what is happening and where the future is happening.

We can find out the future if we are keen to 1) be curious 2) observe trends and 3) put our thoughts in writing. I encourage you to seek industry and professional exposure that allows you to be curious, to observe trends, and to write. Writing clarifies your ideas and is high-form thinking.

And sometimes the most consequential work is boring and difficult right in the moment when it is happening. But sometimes the magic of it lies in the discipline to work on something long enough after the excitement is gone. That has been my own learned experience. One of my best inspirations to illustrate this is point is one scientist Katalin Karikó who spent decades in the lab working on the mRNA technology when it was unknown and fashionable. Later on, her persistent focus on this research problem gave us the Pfizer & BioNTech mRNA Covid-19 vaccine, which has saved hundreds of millions of lives.

Africa needs more young professionals who will curate research problems long enough to find solutions to some of our most pressing challenges, including insurtech, carbon capture and other climate innovations. And a lot of work ahead will require deep thinking and innovation and the discipline to follow through.

So, I invite you to move where the future is, because as we said before, it is not evenly distributed. You do not need to move geographically, but you need to move mentally and by exposure. And this is through what you consume in reading, through your writing and the networks of people you actively seek to engage with.