Low Carbon Transitions for the Insurance Sector
Vivid Economics produced a first-of-a-kind project to assess how a low (or zero) carbon transition might affect insurance underwriting businesses.
The work examined the impacts of the transition on the size and risk profiles of various key global sectors, including energy, heavy industry, transport, agriculture and construction, drawing insight from the NetZero Toolkit as well an extensive series of interviews with industry and insurance market experts. It highlights implications for insurance markets of long-term trends towards new technologies, value chains, contractual models and compliance obligations – as well as more transitory impacts such as asset stranding, M&A, and intellectual property disputes.
The work mapped key findings to Lloyds of London’s major lines of business, and then conducted deep dive analysis into 5 areas where the impacts were deemed to be particularly large.