September 9, 2025 • 20 mins
In this episode of Insurance Tomorrow, Vanessa is joined by Bethany Thomas, Head of Sustainability at Allianz UK, and Tim Maiden, founder of Green Small Business, to explore how climate risks are impacting businesses, how they can adopt sustainable practices and the key role brokers play.
We dive into:
- How climate change is altering the risk landscape.
- What risks are becoming more prevalent.
- Sustainability best practices.
- How brokers can add value to their clients.
- Climate events and how brokers can help their clients stay resilient.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Vanessa Baffoe (00:06):
Hello and welcome back to another episode of Insurance Tomorrow,
brought to you by Allianz Insurance. I'm Vanessa Baffoe. Now,
today we're diving into climate change. 2024 was another year of extreme
weather and new climate records. And as these environmental changes become
more prevalent, they're reshaping the risk landscape for businesses big
(00:26):
and small. Well, I'm delighted to be joined by Bethany
Thomas, who's head of sustainability at Allianz UK and also
Tim Maiden, who's a founder of Green Small Business. They'll
be sharing their expertise on the implications of climate change,
the increasing frequency and severity of extreme weather events, and
also how businesses can build resilience and integrate sustainability into
(00:50):
their operations to navigate these climate- related risks. We'll also
be exploring what role brokers can play in supporting their
clients with these challenges. And then of course, looking ahead
to merging trends and innovations in sustainability. It's great to
have both of you here with us. Welcome.
Tim Maiden (01:07):
Yeah, real pleasure to be with you.
Bethany Thomas (01:09):
Great to be here. Thanks for having me.
Vanessa Baffoe (01:10):
Bethany, I'll start with you. Now, climate change is a global
challenge that's affecting every industry, including insurance, and what's interesting
is that it's sitting at number five in the Allianz
Risk Barometer, but it's actually moved up two places from
2024. And that's just gets me thinking, how's climate change
altering the risk landscape?
Bethany Thomas (01:31):
It's fundamentally reshaping the risk landscape, both in terms of
cost of insurance, but also coverage and availability of insurance.
Yes, climate change has moved up to that fifth spot,
but let's not forget that NatCat comes in at three
and business interruption at two, and really they're all fundamentally
linked to changing that risk landscape. What we are seeing in insurance
(01:54):
is a real increase in weather events and particularly more
significant weather and NatCat incidents. And what that does, of
course is pushes up the cost of the losses. And
that becomes a problem for many of our policyholders who
have affordability issues and there's a real cost of living
and price sensitivity challenge there. But as these risks rise,
(02:17):
what we see is that sometimes the losses become too
high to really be insurable and will we ultimately get
to a place in the future where actually coverage of some
of these risks is really challenged and therefore really fundamentally reshaping
what the placement and landscape look like from availability of
coverage as well.
Vanessa Baffoe (02:37):
Tim, let me throw this one to you. What's your
outlook on this?
Tim Maiden (02:41):
I mean, I would just say I don't work in insurance, but I
imagine it's an increasingly challenging industry to work in terms
of managing those weather related risks because I guess historically
the reliance would be on historic data on weather patterns
that have happened in the past, and those are far
less reliable than they used to be. We're seeing much more
(03:02):
variability and many more extremes in weather events. So, tough
to be an insurer. And I think from a business
perspective, particularly from an SME perspective, we are seeing amongst
our clients higher premiums, tighter terms, reduced availability of cover.
And I suspect that is only going to increase as we move forward. On
(03:24):
the positive side, I do wonder whether the impacts of
climate on insurance, on premiums on the availability of cover
will be one of those mechanisms that really heightens awareness
of the significance of climate change amongst businesses and also amongst
the wider public.
Vanessa Baffoe (03:42):
And Bethany, what risks are becoming more prevalent or significant
due to environmental changes that actually brokers need to be
aware of to help their clients stay resilient?
Bethany Thomas (03:53):
The classic ones are our weather events, storm floods, and
particularly the rise of those mid- scale losses as well.
We are seeing storms and floods and other weather impacts
being much more significant than we've seen previously. In some
senses, the risk impact is changing, but the risk cause
itself isn't. We're seeing a lot of similarity, but we
are just seeing a much bigger impact of those risks.
(04:15):
And also risks coming from maybe unexpected places. For example,
in a supply chain, you may find that critical suppliers
are impacted by an event that then impacts on our
policyholder or our business that we are insuring, which maybe
is not the most obvious place that we are seeing that manifestation
of risks on first thought. The one thing I would
(04:35):
say as well is maybe picking up Tim's sort of optimistic
point is actually this brings opportunity as well. And so
what we are finding is that there's a great opportunity for
businesses to use climate change and the impact that that's having
on their business to find opportunity for innovation and creativity
and to find opportunity from that change as well.
Vanessa Baffoe (04:55):
And Tim, what's your take on this?
Tim Maiden (04:56):
Just picking up on the issue of the physical risks,
particularly in the UK flooding, I think increasingly there's a
growing awareness of the impacts of heat as well in
the summer months, but often those impacts can be indirect.
So, I live up in the Northwest of England. We've
experienced very significant flooding events, particularly in the mid 2010s
(05:18):
and lots of businesses were directly affected by those floods,
but a far greater number of businesses were actually disrupted
by the disruption that took place to infrastructure that those
businesses rely on, whether that's electricity supply or road and
rail infrastructure, that led to a much wider disruption than
(05:43):
just those that were physically flooded themselves.
Bethany Thomas (05:44):
I think it's a fabulous example of seeing NatCat, business interruption and
climate change really being linked in together there.
Vanessa Baffoe (05:55):
Now, Tim, I want to go back to the Allianz
Risk Barometer, and the reason I want to do that
is because physical damage and business interruption from extreme weather
events are actually two other things that businesses fear the
most. So, with that in mind, what is it that
you think small businesses can do to protect themselves?
Tim Maiden (06:13):
Well, it has to start with understanding what those risks
are, and in the UK we have some fantastic resources
to help us to understand what those risks are. We
have for example, the climate change committee and their UK
risk assessments, and there are specific sections of that risk
(06:35):
assessment that are dedicated to the risks that face business, really
handy summaries of what those key risks are. So, at a
really high level, businesses can engage with those sorts of
resources to better understand risks. And then more locally, there
are often local authority risk assessments available. And then we
(06:57):
obviously have the environment agencies resources on flood risk for
better understanding those flood risk issues. It has to start
there with an understanding of what the risks are. That
can then feed into risk assessments, and then obviously the
contingency planning that needs to follow, whether that's finding alternative suppliers for
(07:17):
when supply chains are disrupted, whether that's identifying options for
temporary power supply, flood resilience measures as well, maybe necessary
onsite adapting to heat through shading, cooling interventions, and even
just engaging with your suppliers so that you understand their
(07:38):
preparedness, their resilience so that you can plan accordingly.
Vanessa Baffoe (07:44):
Bethany, that's interesting, isn't it? And it's actually something you
touched on very briefly, engaging with your suppliers just to
see where they're coming from and what kind of preparedness they have in place. What's your take on what Tim's
just said?
Bethany Thomas (07:56):
I 100% agree. I think bringing awareness and understanding is
always going to be the start point for understanding the
impact that climate change has on your business and on
your insurability. And so by engaging with your key suppliers, your
key customers, and your other key stakeholders, it's really important
to start mapping and understanding the risks that your business
(08:17):
might be subjected to. And I think working with the
broker in an insurance situation is a really important partnership
to have that relationship with. It's important to consider the
financial impacts that might arise from a risk event, but also starting
to think about the environmental impacts as well that come
from that and thinking from that sort of double materiality
(08:39):
mindset that we're starting to see as a form of
risk assessment for businesses as well.
Vanessa Baffoe (08:44):
And how can a broker then add value to their
clients by helping them to navigate the climate risks?
Bethany Thomas (08:52):
Again, I think it comes back to education and providing
that advice and some of those tools that Tim mentioned,
but then there's also a really important role for data
to play in this in terms of understanding and even
modeling some of those risks as well. Having access to
tools and systems and abilities to look at and model
(09:13):
what's going to be the implication of something like that
is really important. And I think brokers bring an incredible
expertise to that process as well.
Vanessa Baffoe (09:22):
Tim, what about you?
Tim Maiden (09:22):
I think a key role here is in terms of encouraging,
perhaps requiring contingency planning. If I think about my business,
we're a carbon consultancy, a sustainability consultancy, and we are
heavily reliant on our software platform. It's where all our work happens, and therefore we are
(09:44):
at significant risk of cyber attack. And when we renew
our insurance, we are pushed very hard in ensuring that
we've got sufficient contingency plans in place, should we be
subject to a cyber attack. So, I every year have
to demonstrate that were our systems subject to a cyber
attack. We could be up and running within an hour
(10:05):
of that attack taking place, and we only do that
because the insurer required it of us. It's a really
helpful thing to do, and we could see that sort of
thing becoming more and more common from insurers in helping their clients to
plan effectively for the impacts of climate change.
Vanessa Baffoe (10:22):
Now, Tim, let's talk about best practices for businesses. So,
we've spoken about the risk, but what are some of
the best practices for businesses to integrate sustainability into their operations?
Tim Maiden (10:33):
I think the key in terms of approaching sustainability is
comprehensiveness, thinking in a comprehensive way about your relationship and
your impact as a business on the climate. Often when
we talk to businesses or talk to individuals about their
environmental impacts, they immediately think of waste and recycling, but
(10:56):
obviously it's so much broader than that. It's about the
energy we use and the fuel that we burn and
the commuting and the business travel and all of those goods
and services that we buy as businesses that have so
many indirect impacts on the environment, including the insurance that
we buy and the banking that we do and so
(11:16):
on. So, thinking about all of those things is so
important. And one of the things that we do to
help businesses to think in a really holistic way about their
impacts on the environment is to do carbon footprinting, to
understand where their emissions are coming from within the business
activity that they conduct, and then having an understanding of
(11:40):
those sources of carbon emissions, of carbon pollution, we can then
think about the effective action that needs to be taken
to address those.
Vanessa Baffoe (11:49):
Bethany, I can see you nodding frantically there. I can
see you really want to get in.
Bethany Thomas (11:52):
Yeah, absolutely. And I think you say that partnership with
the insurer there into understanding risks, it's exactly the case.
An insurer has so many tools to be able to
help you to understand that as well. To give an
Allianz example, for instance, where we've looked at our own
operations and our own environmental impact, we know that our
energy usage and our transportation usage of all of our
(12:15):
employees is the material impact and areas that we can
really tackle proactively. So, by identifying those as the heavy
impact areas, we've been able to take actions to address
it by transferring our employee vehicles to electric vehicles or
by using renewable energy in all of our office buildings.
And the great thing that's come with that as well
is there's actually an economic benefit from doing that as well. There
(12:37):
can often be a cost savings so often there's a
really nice double benefit there as well, which is fantastic.
Vanessa Baffoe (12:44):
Let's look ahead here, and Bethany, I'll start with you.
How do you see the role of the broker evolving
and adapting to climate change and sustainability?
Bethany Thomas (12:54):
I think there's several ways. First and foremost, they have
a role to play in advising their clients in understanding
that risk, doing these risk assessments and providing that really
tailored advice for the coverage that they need. But then
even taking that further, it may be being able to
advise on products and services or even insurers that are able
to provide that sustainably linked coverage that a customer might
(13:18):
need or even be looking for. And then finally, I
think brokers all have a responsibility to be assessing their
own impact and what they can do as a business
as well. And if a broker is an independent broker,
then Allianz have a fantastic resource that they can use.
Our Allianz Net Zero Accelerator helps small independent brokers to
(13:39):
be able to map their own footprint and understand their
own impact as well. So, it's really a full cycle
that they can be involved with.
Vanessa Baffoe (13:46):
Absolutely.
Bethany Thomas (13:47):
I think this is really interesting because we are increasingly
seeing customers wanting to buy sustainable insurance products, whatever that
looks like, and being more conscious of their purchasing capability.
So, being able to look at an insurer's credibility is
a really great way to start. And a broker's role
in that is really important.
Vanessa Baffoe (14:08):
And actually talking about a broker's role, as you just
said there, what skills should they be developing to stay ahead?
Bethany Thomas (14:14):
For me, it's about that climate literate mindset, making it
a cultural shift in an organization, empowering yourself and your
organization with that knowledge, sustainability and environmental topics are complex, but
there's a wealth of resources and it's really important to
start upskilling and being aware of your role and the
(14:34):
part that you can play in environmental journeys. So, education,
always comes back to awareness and education for me.
Vanessa Baffoe (14:41):
Exactly. You can never know too much.
Bethany Thomas (14:42):
Exactly.
Vanessa Baffoe (14:43):
Always room to learn. And Tim, let me just ask
you this actually. Are there any emerging trends or innovations
in sustainability that you think will help brokers in the industry?
Tim Maiden (14:55):
Well, I think up until recently, much of the activity,
particularly among small and medium- sized businesses with regard to
sustainability has been voluntary. They have pursued a more sustainable
approach to business because that felt important to them because
they wanted to do that from a moral, ethical perspective.
And that impetus remains very strong. We see that through
(15:18):
the likes of the B Corp movement, which is growing
very rapidly. But increasingly, I think the action on sustainability
among small and medium- sized businesses is involuntary, if you
like. It's being pushed upon them, particularly through supply chains.
So, more and more clients, customers of these businesses are demanding
(15:41):
carbon reporting, better environmental management, they're requiring carbon reduction targets.
And we are seeing that more and more in the
clients that we work with. And brokers can play a
role in helping their clients to respond to those sorts
of needs that are out there. One of the things
that will happen within B Corp, B Corp's new standard
(16:05):
is being launched next year, and one of the things
that all B Corps will have to do under that
new standard is demonstrate how they have taken account of the
environment in their main procurement decisions. And for a lot
of SMEs, their insurance premiums will be among their most
significant procurement decisions. So, they will need to demonstrate to
(16:28):
B Lab the purveyors of B Corp, that they are taking account of
the environment when they're choosing their insurance. So, brokers need
to be aware of that. If they're working with B
Corps, with prospective B Corps, they need to be helping
them to demonstrate that when they're making those decisions.
Vanessa Baffoe (16:46):
And Bethany, are there any emerging trends or innovations on sustainability in
the broking industry that can help our brokers?
Bethany Thomas (16:56):
I wouldn't say specifically to the broking industry, but I
think increasingly, unfortunately, as the 1. 5 degree pathway becomes
unfortunately quite un- plausible, what we're seeing is really a focus
from moving from a focus on climate mitigation to actually
starting to think about climate adaptation and how we can
lower the risk of climate impacts, but also climate resilience
(17:19):
and how we can bounce back stronger after a climate
event. And I think the shift of perspective from preventing
a climate event to actually adapting and becoming more resilient,
whilst unfortunate that we've need to get to that place
is really important when thinking about that whole comprehensive portfolio
of risks. So, I think that's really where we'll see
the next couple of years, the insurance industry as a
(17:41):
whole in really diving into and looking at how that
comprehensively comes together as an approach for managing risk.
Vanessa Baffoe (17:48):
So, just kind of being prepared. If the worst comes,
you are able to absolve it and keep moving, basically.
Bethany Thomas (17:54):
It's having that plan A, B, and C. First, avoid
the impact, secondly, help to reduce the impact and thirdly,
how do you recover quickly from that impact is that full relationship.
Vanessa Baffoe (18:05):
All angles covered basically.
Bethany Thomas (18:06):
Exactly. Being fully prepared.
Vanessa Baffoe (18:07):
That's it. And just before I let you go, is there anything
that you'd like to add?
Bethany Thomas (18:11):
I think maybe to end on a bit of a
positive where really multiple studies have happened and we see
in Allianz as well, companies and businesses that do have a sustainability
mindset and are focused on managing their environmental impact tend
to actually have a really positive correlation with good financial
performance and good risk management. And that has to be
(18:32):
a really good outcome of really proactively thinking about what's
ahead and how to run your business sustainably.
Vanessa Baffoe (18:39):
Absolutely. What about you, Tim?
Tim Maiden (18:41):
I guess just to emphasize that in thinking about carbon
reduction, which is a big focus of what we do, there
are real co- benefits in terms of climate resilience. So,
if you are able, as an example, if you are
able to find more local suppliers to reduce transportation emissions,
(19:01):
that aspect of your carbon footprint, that most likely will
help to make you more resilient, reducing the lengths of
those supply chains, reducing the risk associated with that. If
you are able to get on- site solar power that reduces
your reliance on the grid, reduces your exposure to volatile
energy prices. So, I think there are real co- benefits
(19:23):
in thinking about these two agendas together. What can you
do to reduce your emissions, but also how does that
help you in terms of building your resilience to the ever-
growing inks of climate change?
Vanessa Baffoe (19:36):
Well, with that in mind, we'll bring this episode of
Insurance Tomorrow to a close. Massive thank you to Bethany
Thomas, who's head of sustainability at Allianz UK, and also to
Tim Maiden, who's the founder of Green Small Business. And a massive
thank you also to you for joining us. Now, don't
forget, you can subscribe through your normal podcast app, and
this means you never have to miss a single episode.
(19:58):
And while you're there, why not leave us a review?
We'd love to hear from you. Until next time, see
you soon.
Hello and welcome back to another episode of Insurance Tomorrow,
brought to you by Allianz Insurance. I'm Vanessa Baffoe. Now,
today we're diving into climate change. 2024 was another year of extreme
weather and new climate records. And as these environmental changes become
more prevalent, they're reshaping the risk landscape for businesses big
(00:26):
and small. Well, I'm delighted to be joined by Bethany
Thomas, who's head of sustainability at Allianz UK and also
Tim Maiden, who's a founder of Green Small Business. They'll
be sharing their expertise on the implications of climate change,
the increasing frequency and severity of extreme weather events, and
also how businesses can build resilience and integrate sustainability into
(00:50):
their operations to navigate these climate- related risks. We'll also
be exploring what role brokers can play in supporting their
clients with these challenges. And then of course, looking ahead
to merging trends and innovations in sustainability. It's great to
have both of you here with us. Welcome.
Tim Maiden (01:07):
Yeah, real pleasure to be with you.
Bethany Thomas (01:09):
Great to be here. Thanks for having me.
Vanessa Baffoe (01:10):
Bethany, I'll start with you. Now, climate change is a global
challenge that's affecting every industry, including insurance, and what's interesting
is that it's sitting at number five in the Allianz
Risk Barometer, but it's actually moved up two places from
2024. And that's just gets me thinking, how's climate change
altering the risk landscape?
Bethany Thomas (01:31):
It's fundamentally reshaping the risk landscape, both in terms of
cost of insurance, but also coverage and availability of insurance.
Yes, climate change has moved up to that fifth spot,
but let's not forget that NatCat comes in at three
and business interruption at two, and really they're all fundamentally
linked to changing that risk landscape. What we are seeing in insurance
(01:54):
is a real increase in weather events and particularly more
significant weather and NatCat incidents. And what that does, of
course is pushes up the cost of the losses. And
that becomes a problem for many of our policyholders who
have affordability issues and there's a real cost of living
and price sensitivity challenge there. But as these risks rise,
(02:17):
what we see is that sometimes the losses become too
high to really be insurable and will we ultimately get
to a place in the future where actually coverage of some
of these risks is really challenged and therefore really fundamentally reshaping
what the placement and landscape look like from availability of
coverage as well.
Vanessa Baffoe (02:37):
Tim, let me throw this one to you. What's your
outlook on this?
Tim Maiden (02:41):
I mean, I would just say I don't work in insurance, but I
imagine it's an increasingly challenging industry to work in terms
of managing those weather related risks because I guess historically
the reliance would be on historic data on weather patterns
that have happened in the past, and those are far
less reliable than they used to be. We're seeing much more
(03:02):
variability and many more extremes in weather events. So, tough
to be an insurer. And I think from a business
perspective, particularly from an SME perspective, we are seeing amongst
our clients higher premiums, tighter terms, reduced availability of cover.
And I suspect that is only going to increase as we move forward. On
(03:24):
the positive side, I do wonder whether the impacts of
climate on insurance, on premiums on the availability of cover
will be one of those mechanisms that really heightens awareness
of the significance of climate change amongst businesses and also amongst
the wider public.
Vanessa Baffoe (03:42):
And Bethany, what risks are becoming more prevalent or significant
due to environmental changes that actually brokers need to be
aware of to help their clients stay resilient?
Bethany Thomas (03:53):
The classic ones are our weather events, storm floods, and
particularly the rise of those mid- scale losses as well.
We are seeing storms and floods and other weather impacts
being much more significant than we've seen previously. In some
senses, the risk impact is changing, but the risk cause
itself isn't. We're seeing a lot of similarity, but we
are just seeing a much bigger impact of those risks.
(04:15):
And also risks coming from maybe unexpected places. For example,
in a supply chain, you may find that critical suppliers
are impacted by an event that then impacts on our
policyholder or our business that we are insuring, which maybe
is not the most obvious place that we are seeing that manifestation
of risks on first thought. The one thing I would
(04:35):
say as well is maybe picking up Tim's sort of optimistic
point is actually this brings opportunity as well. And so
what we are finding is that there's a great opportunity for
businesses to use climate change and the impact that that's having
on their business to find opportunity for innovation and creativity
and to find opportunity from that change as well.
Vanessa Baffoe (04:55):
And Tim, what's your take on this?
Tim Maiden (04:56):
Just picking up on the issue of the physical risks,
particularly in the UK flooding, I think increasingly there's a
growing awareness of the impacts of heat as well in
the summer months, but often those impacts can be indirect.
So, I live up in the Northwest of England. We've
experienced very significant flooding events, particularly in the mid 2010s
(05:18):
and lots of businesses were directly affected by those floods,
but a far greater number of businesses were actually disrupted
by the disruption that took place to infrastructure that those
businesses rely on, whether that's electricity supply or road and
rail infrastructure, that led to a much wider disruption than
(05:43):
just those that were physically flooded themselves.
Bethany Thomas (05:44):
I think it's a fabulous example of seeing NatCat, business interruption and
climate change really being linked in together there.
Vanessa Baffoe (05:55):
Now, Tim, I want to go back to the Allianz
Risk Barometer, and the reason I want to do that
is because physical damage and business interruption from extreme weather
events are actually two other things that businesses fear the
most. So, with that in mind, what is it that
you think small businesses can do to protect themselves?
Tim Maiden (06:13):
Well, it has to start with understanding what those risks
are, and in the UK we have some fantastic resources
to help us to understand what those risks are. We
have for example, the climate change committee and their UK
risk assessments, and there are specific sections of that risk
(06:35):
assessment that are dedicated to the risks that face business, really
handy summaries of what those key risks are. So, at a
really high level, businesses can engage with those sorts of
resources to better understand risks. And then more locally, there
are often local authority risk assessments available. And then we
(06:57):
obviously have the environment agencies resources on flood risk for
better understanding those flood risk issues. It has to start
there with an understanding of what the risks are. That
can then feed into risk assessments, and then obviously the
contingency planning that needs to follow, whether that's finding alternative suppliers for
(07:17):
when supply chains are disrupted, whether that's identifying options for
temporary power supply, flood resilience measures as well, maybe necessary
onsite adapting to heat through shading, cooling interventions, and even
just engaging with your suppliers so that you understand their
(07:38):
preparedness, their resilience so that you can plan accordingly.
Vanessa Baffoe (07:44):
Bethany, that's interesting, isn't it? And it's actually something you
touched on very briefly, engaging with your suppliers just to
see where they're coming from and what kind of preparedness they have in place. What's your take on what Tim's
just said?
Bethany Thomas (07:56):
I 100% agree. I think bringing awareness and understanding is
always going to be the start point for understanding the
impact that climate change has on your business and on
your insurability. And so by engaging with your key suppliers, your
key customers, and your other key stakeholders, it's really important
to start mapping and understanding the risks that your business
(08:17):
might be subjected to. And I think working with the
broker in an insurance situation is a really important partnership
to have that relationship with. It's important to consider the
financial impacts that might arise from a risk event, but also starting
to think about the environmental impacts as well that come
from that and thinking from that sort of double materiality
(08:39):
mindset that we're starting to see as a form of
risk assessment for businesses as well.
Vanessa Baffoe (08:44):
And how can a broker then add value to their
clients by helping them to navigate the climate risks?
Bethany Thomas (08:52):
Again, I think it comes back to education and providing
that advice and some of those tools that Tim mentioned,
but then there's also a really important role for data
to play in this in terms of understanding and even
modeling some of those risks as well. Having access to
tools and systems and abilities to look at and model
(09:13):
what's going to be the implication of something like that
is really important. And I think brokers bring an incredible
expertise to that process as well.
Vanessa Baffoe (09:22):
Tim, what about you?
Tim Maiden (09:22):
I think a key role here is in terms of encouraging,
perhaps requiring contingency planning. If I think about my business,
we're a carbon consultancy, a sustainability consultancy, and we are
heavily reliant on our software platform. It's where all our work happens, and therefore we are
(09:44):
at significant risk of cyber attack. And when we renew
our insurance, we are pushed very hard in ensuring that
we've got sufficient contingency plans in place, should we be
subject to a cyber attack. So, I every year have
to demonstrate that were our systems subject to a cyber
attack. We could be up and running within an hour
(10:05):
of that attack taking place, and we only do that
because the insurer required it of us. It's a really
helpful thing to do, and we could see that sort of
thing becoming more and more common from insurers in helping their clients to
plan effectively for the impacts of climate change.
Vanessa Baffoe (10:22):
Now, Tim, let's talk about best practices for businesses. So,
we've spoken about the risk, but what are some of
the best practices for businesses to integrate sustainability into their operations?
Tim Maiden (10:33):
I think the key in terms of approaching sustainability is
comprehensiveness, thinking in a comprehensive way about your relationship and
your impact as a business on the climate. Often when
we talk to businesses or talk to individuals about their
environmental impacts, they immediately think of waste and recycling, but
(10:56):
obviously it's so much broader than that. It's about the
energy we use and the fuel that we burn and
the commuting and the business travel and all of those goods
and services that we buy as businesses that have so
many indirect impacts on the environment, including the insurance that
we buy and the banking that we do and so
(11:16):
on. So, thinking about all of those things is so
important. And one of the things that we do to
help businesses to think in a really holistic way about their
impacts on the environment is to do carbon footprinting, to
understand where their emissions are coming from within the business
activity that they conduct, and then having an understanding of
(11:40):
those sources of carbon emissions, of carbon pollution, we can then
think about the effective action that needs to be taken
to address those.
Vanessa Baffoe (11:49):
Bethany, I can see you nodding frantically there. I can
see you really want to get in.
Bethany Thomas (11:52):
Yeah, absolutely. And I think you say that partnership with
the insurer there into understanding risks, it's exactly the case.
An insurer has so many tools to be able to
help you to understand that as well. To give an
Allianz example, for instance, where we've looked at our own
operations and our own environmental impact, we know that our
energy usage and our transportation usage of all of our
(12:15):
employees is the material impact and areas that we can
really tackle proactively. So, by identifying those as the heavy
impact areas, we've been able to take actions to address
it by transferring our employee vehicles to electric vehicles or
by using renewable energy in all of our office buildings.
And the great thing that's come with that as well
is there's actually an economic benefit from doing that as well. There
(12:37):
can often be a cost savings so often there's a
really nice double benefit there as well, which is fantastic.
Vanessa Baffoe (12:44):
Let's look ahead here, and Bethany, I'll start with you.
How do you see the role of the broker evolving
and adapting to climate change and sustainability?
Bethany Thomas (12:54):
I think there's several ways. First and foremost, they have
a role to play in advising their clients in understanding
that risk, doing these risk assessments and providing that really
tailored advice for the coverage that they need. But then
even taking that further, it may be being able to
advise on products and services or even insurers that are able
to provide that sustainably linked coverage that a customer might
(13:18):
need or even be looking for. And then finally, I
think brokers all have a responsibility to be assessing their
own impact and what they can do as a business
as well. And if a broker is an independent broker,
then Allianz have a fantastic resource that they can use.
Our Allianz Net Zero Accelerator helps small independent brokers to
(13:39):
be able to map their own footprint and understand their
own impact as well. So, it's really a full cycle
that they can be involved with.
Vanessa Baffoe (13:46):
Absolutely.
Bethany Thomas (13:47):
I think this is really interesting because we are increasingly
seeing customers wanting to buy sustainable insurance products, whatever that
looks like, and being more conscious of their purchasing capability.
So, being able to look at an insurer's credibility is
a really great way to start. And a broker's role
in that is really important.
Vanessa Baffoe (14:08):
And actually talking about a broker's role, as you just
said there, what skills should they be developing to stay ahead?
Bethany Thomas (14:14):
For me, it's about that climate literate mindset, making it
a cultural shift in an organization, empowering yourself and your
organization with that knowledge, sustainability and environmental topics are complex, but
there's a wealth of resources and it's really important to
start upskilling and being aware of your role and the
(14:34):
part that you can play in environmental journeys. So, education,
always comes back to awareness and education for me.
Vanessa Baffoe (14:41):
Exactly. You can never know too much.
Bethany Thomas (14:42):
Exactly.
Vanessa Baffoe (14:43):
Always room to learn. And Tim, let me just ask
you this actually. Are there any emerging trends or innovations
in sustainability that you think will help brokers in the industry?
Tim Maiden (14:55):
Well, I think up until recently, much of the activity,
particularly among small and medium- sized businesses with regard to
sustainability has been voluntary. They have pursued a more sustainable
approach to business because that felt important to them because
they wanted to do that from a moral, ethical perspective.
And that impetus remains very strong. We see that through
(15:18):
the likes of the B Corp movement, which is growing
very rapidly. But increasingly, I think the action on sustainability
among small and medium- sized businesses is involuntary, if you
like. It's being pushed upon them, particularly through supply chains.
So, more and more clients, customers of these businesses are demanding
(15:41):
carbon reporting, better environmental management, they're requiring carbon reduction targets.
And we are seeing that more and more in the
clients that we work with. And brokers can play a
role in helping their clients to respond to those sorts
of needs that are out there. One of the things
that will happen within B Corp, B Corp's new standard
(16:05):
is being launched next year, and one of the things
that all B Corps will have to do under that
new standard is demonstrate how they have taken account of the
environment in their main procurement decisions. And for a lot
of SMEs, their insurance premiums will be among their most
significant procurement decisions. So, they will need to demonstrate to
(16:28):
B Lab the purveyors of B Corp, that they are taking account of
the environment when they're choosing their insurance. So, brokers need
to be aware of that. If they're working with B
Corps, with prospective B Corps, they need to be helping
them to demonstrate that when they're making those decisions.
Vanessa Baffoe (16:46):
And Bethany, are there any emerging trends or innovations on sustainability in
the broking industry that can help our brokers?
Bethany Thomas (16:56):
I wouldn't say specifically to the broking industry, but I
think increasingly, unfortunately, as the 1. 5 degree pathway becomes
unfortunately quite un- plausible, what we're seeing is really a focus
from moving from a focus on climate mitigation to actually
starting to think about climate adaptation and how we can
lower the risk of climate impacts, but also climate resilience
(17:19):
and how we can bounce back stronger after a climate
event. And I think the shift of perspective from preventing
a climate event to actually adapting and becoming more resilient,
whilst unfortunate that we've need to get to that place
is really important when thinking about that whole comprehensive portfolio
of risks. So, I think that's really where we'll see
the next couple of years, the insurance industry as a
(17:41):
whole in really diving into and looking at how that
comprehensively comes together as an approach for managing risk.
Vanessa Baffoe (17:48):
So, just kind of being prepared. If the worst comes,
you are able to absolve it and keep moving, basically.
Bethany Thomas (17:54):
It's having that plan A, B, and C. First, avoid
the impact, secondly, help to reduce the impact and thirdly,
how do you recover quickly from that impact is that full relationship.
Vanessa Baffoe (18:05):
All angles covered basically.
Bethany Thomas (18:06):
Exactly. Being fully prepared.
Vanessa Baffoe (18:07):
That's it. And just before I let you go, is there anything
that you'd like to add?
Bethany Thomas (18:11):
I think maybe to end on a bit of a
positive where really multiple studies have happened and we see
in Allianz as well, companies and businesses that do have a sustainability
mindset and are focused on managing their environmental impact tend
to actually have a really positive correlation with good financial
performance and good risk management. And that has to be
(18:32):
a really good outcome of really proactively thinking about what's
ahead and how to run your business sustainably.
Vanessa Baffoe (18:39):
Absolutely. What about you, Tim?
Tim Maiden (18:41):
I guess just to emphasize that in thinking about carbon
reduction, which is a big focus of what we do, there
are real co- benefits in terms of climate resilience. So,
if you are able, as an example, if you are
able to find more local suppliers to reduce transportation emissions,
(19:01):
that aspect of your carbon footprint, that most likely will
help to make you more resilient, reducing the lengths of
those supply chains, reducing the risk associated with that. If
you are able to get on- site solar power that reduces
your reliance on the grid, reduces your exposure to volatile
energy prices. So, I think there are real co- benefits
(19:23):
in thinking about these two agendas together. What can you
do to reduce your emissions, but also how does that
help you in terms of building your resilience to the ever-
growing inks of climate change?
Vanessa Baffoe (19:36):
Well, with that in mind, we'll bring this episode of
Insurance Tomorrow to a close. Massive thank you to Bethany
Thomas, who's head of sustainability at Allianz UK, and also to
Tim Maiden, who's the founder of Green Small Business. And a massive
thank you also to you for joining us. Now, don't
forget, you can subscribe through your normal podcast app, and
this means you never have to miss a single episode.
(19:58):
And while you're there, why not leave us a review?
We'd love to hear from you. Until next time, see
you soon.
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