Catlin > Investor Relations > Corporate Governance > ClimateWise Reporting
ClimateWise Reporting
Catlin Underwriting Agencies Limited, which manages the Catlin Syndicate at Lloyd's, is a member of
ClimateWise, a group of leading companies and organisations in the insurance industry which are committed to taking action on Climate Change and to reporting publicly on their own performance.
ClimateWise has established a set of principles to provide a framework for insurance and reinsurance companies worldwide to set out how they will build Climate Change into their business operations.
Following are the ClimateWise principles and the steps that Catlin has taken to date. Lloyd's is also a member of ClimateWise, and it has
reported separately on the actions that the Lloyd's market -- including Catlin Underwriting Agencies -- has taken.
Principle 1: Lead in Risk Analysis
Catlin has conducted research into the impacts, challenges and opportunities of Climate Change. This has included a detailed evaluation of Climate Change model projections derived from the Intergovernmental Panel for Climate Change (IPCC) and other independent bodies to assess the potential impacts of gradual and extreme climate events in key worldwide regions. This research has provided a platform for further Climate Change risk research and analysis in the following areas:
Climate Change Impacts
- Conducted high level simulations of increased tropical cyclone frequency with Catlin¡¦s Aggregate Modelling Team using internal loss models to test the impacts on gross losses from a gradual increase in tropical cyclone frequency of single events in the US, Europe and Japan and assuming no change in landfall frequencies.
- Currently conducting research into new product and service opportunities driven by Climate Change and the low carbon economy including the potential threats to existing products and industries.
Climate Change Forecasting -
Catlin is currently conducting research into Climate Change models/tools which Catlin can adopt or invest in to provide an improved understanding of local Climate Change at shorter timeframes and support improved future strategic decision-making on risk pricing and allocation. The output of this research will provide an indication of the tools/models Catlin can potentially adopt and invest in to support strategic decision making.
Catlin is also committed to working with the scientific, business and governmental community to share research on key Climate Change issues:
- Lighthill Risk Network -- Catlin is founder member of the Lighthill Risk Network, a not-for-profit organisation which brings together scientific researchers worldwide, industry, government and third party organisations to exchange risk-related expertise.
- Catlin Arctic Survey -- Catlin is primary sponsor of the Catlin Arctic Survey, a major scientific effort which during 2009 measured the thickness of the remaining permanent Arctic Ocean Sea ice to assess the impact of Climate Change. The findings of this expedition were shared and presented to the UN Climate Change Conference in Copenhagen in December 2009.
Principle 2: Inform Public Policy Making
By joining ClimateWise, Catlin is expressing its support for the work being pursued by the insurance market. As a managing agent, we work closely with Lloyd's in supporting their activities in promoting public awareness and debate on the need to take Government action on Climate Change.
Catlin is also currently investigating the practicalities and potential benefits of working jointly with key business-led initiatives and insurance bodies which are focused on driving public debate for the implementation of adaptation measures in key vulnerable areas. These have so far included the Association of British Insurers (ABI), the Resilient Coast Project and Lloyd's.
Principle 3: Support Climate Awareness Amongst Customers
Catlin has engaged with key customer groups to drive a better understanding and awareness of Climate Change and encourage relevant adaptation and behaviour practices:
- Broker Partners -- Catlin Chief Executive Stephen Catlin and Chief Underwriting Officer Paul Brand recently led a team of senior individuals from key broker partners -- including Aon, Marsh and Miller -- to the Arctic Circle to highlight the potential issues of global Climate Change and the implications for the worldwide Insurance industry. The trip was focussed on equipping the team with greater knowledge about the importance the Polar Regions to Climate Change and how the Catlin Arctic Survey research attempts to measure Climate Change at the North Pole.
- Insureds -- Catlin has started the process of advising and encouraging customers to take note of Climate Change and adapt their behaviour accordingly with the launch of FleetDirections, an initiative targeted at the motor fleet manager. Catlin now provides a comprehensive 'green fleet' approach including a free CO2 emissions calculator and green fleet healthcheck and is the first insurer to recognise green credentials in pricing for motor fleet insurance.
Catlin has also been engaged in the discussion of sustainable claims with Lloyd's and ClimateWise to develop a framework that aims to increase the usage and deployment of sustainable materials in the event of a claim. In line with this initiative Catlin sponsored a Claims Clinic held by Insurance Times magazine in July 2009 that focused on the debate about driving adaptation and sustainability through the claims process.
Principle 4: Reduce the Environmental Impact of Our Business
Catlin has focused on reducing its environmental impact through the following internal Group initiatives:
- Employees Awareness and Engagement -- Catlin encourages employees wherever possible to recycle paper and other renewable products. Catlin strives to minimise energy consumption through the use of automatic light controls that switch off lights when employees are not at their desks.
Sponsorship of the Catlin Arctic Survey has also provided an opportunity to engage employees and raise general awareness about Climate Change. Regular updates have been posted on the Group Intranet and newsletters distributed to both employees and brokers to highlight the scientific nature of the survey and its relevance to global warming given the importance of the polar ice cap. Furthermore, as a component of the Catlin Arctic Survey, Arctic Survey Education has been developed an initiative to inspire and engage young people with facts about the Arctic and its role as a barometer of Climate Change.
- Supplier Sustainability -- Catlin has a limited number of suppliers as part of its day-to-day operations and no influence on the sustainability of the building it operates from in London. Catlin has however begun to incorporate sustainability criteria into current and future decisions in regards to accommodation and suppliers.
Catlin has confirmed its decision to relocate its main UK operations to more modern and environmentally friendly building facilities in 2011. This relocation will provide Catlin with the opportunity to analyse and reduce its environmental impact. With a sustainable design, Catlin is looking at taking various energy, water and waste efficiency measures amongst other environmental initiatives. Moving to an existing rather than a new build allows us to reuse and improve the existing building stock, a more sustainable option compared to that of a new build project as it utilises significantly less natural resources
- Group Carbon Footprint Measurement, Reduction and Disclosure
Measurement -- Catlin, in collaboration with Enviros Consulting Ltd, has calculated the carbon footprint for its worldwide operations from January 2008 to December 2008. The methodology used for the calculation of the Catlin worldwide carbon footprint is in line with World Business Council for Sustainable Development (WBCSD) Greenhouse Gas (GHG) Protocol, the GHG Protocol and uses published emissions factors from the UK Government.
Reduction -- Catlin has entered into a contract with The Carbon Neutral Company, a leading carbon offset and climate consulting business, to offset the carbon dioxide emissions created by Catlin employees' business-related air travel relating to 2007, 2008 and subsequent years. The offset credits purchased by Catlin will be used to finance alternative energy and other environmentally sound projects on a quarterly basis. For example, Catlin's offset credits in the first quarter of 2008 helped finance the Rhine-Rhur Waste Gas Power Project in Germany, which captures methane gas from three abandoned coal mines and uses it to generate electricity and heat.
The Group utilises video conferencing capabilities worldwide to encourage employees, where possible, to conduct both internal and external meetings via video conference rather than travel.
As part of its day-to-day business, Catlin attempts to make good environmental practice part of its everyday activities. For example, the Group operates a comprehensive document scanning system which enables employees worldwide to view documents electronically rather than on paper, minimising waste.
In addition to Catlin's current reduction activities, Catlin is also currently finalising new proposals for the implementation of enhanced recycling and carbon reduction policies.
Disclosure -- Catlin will disclose the Group's worldwide carbon footprint in the 2009 Annual Report & Accounts using a globally recognised standard. Catlin has also signed up to the Carbon Disclosure Project (CDP) and provided information on Climate Change opportunities and risks to the business, worldwide carbon footprint measurement and reduction activities and related corporate governance.
Principle 5: Report and Be Accountable
Catlin is focused on continually building and updating key Climate Change research and distributing this to a selected number of representatives across the Group. This process drives regular debate at all levels of the organisation and informs Catlin's business strategy and planning.
Catlin has also published a statement in its 2007 and 2008 Annual Reports detailing its commitment and compliance performance as a member of ClimateWise.
Principle 6: Incorporate Climate Change Into Our Investment Strategies
As part of Catlin’s initial research into the potential Climate Change impacts on Catlin, research and consultation was undertaken to determine the potential impacts of Climate Change on Catlin’s investment strategy and any associated assumptions. This included assessing the potential impacts of different extreme Climate Change events on each of Catlin’s investment classes.
This assessment was reviewed and discussed by all members of the Investment team. Catlin’s investments are predominantly in cash instruments and fixed-interest securities. Catlin does not directly invest in individual companies and its current approach is to invest with external investment managers with the skills to optimise performance.
Catlin is currently undertaking additional detailed research in areas such as opportunities to invest in ‘green’ funds and how fund managers address the impact of climate change risk on their managed portfolios.
