United Nations Secretary-General Ban Ki-moon has praised the insurance industry’s leadership on climate change, and says it is a “key actor” in managing and reducing climate change risks.

Mr Ban notes the industry’s “critical [role] in forging new instruments to manage risks”.

“The world needs your leadership to meet the climate challenge,” he told a meeting with insurance industry representatives at UN headquarters in New York on April 13.

Mr Ban says climate change will “profoundly” affect the industry in two ways.

“First, you will be faced with mounting claims of a magnitude not yet seen. Second, your investment decisions could give rise to unexpected risks.”

He says increasing insurance and social protection will give the world capacity to absorb climate change shocks.

However, Mr Ban stresses the insurance industry has more to do, and he has set five challenges, each with a deadline of 2020:

• “Decarbonise” investments so they do not contribute to greenhouse emissions, and measure the industry’s carbon footprint
• Double investments in clean, sustainable energy
• Ensure early warning and early actions are made available to the most vulnerable countries
• Provide the most vulnerable people with greater access to risk transfer mechanisms
• Develop auditable industry standards that incorporate the UN’s sustainable development goals, aimed at “ending poverty, protecting the planet and ensuring prosperity for all”.

The UN’s sustainable development blueprint, comprising 17 goals, was adopted in September last year.

“The goals underscore the reality that all key sectors of the economy are interlinked and that all sectors of society must benefit from development if it is to be truly sustainable,” Mr Ban said. “That is why sustainable development must be the framework for insurance and investment decisions that will drive lasting, positive change for all.”

Climate change is certainly occupying minds in the insurance industry.

Swiss Re Natural Hazards Expert Megan Linkin used the recent anniversary of the Titanic sinking (April 15 1912) to warn against inaction.

“Ultimately, the Titanic sank because humanity thought it had conquered Mother Nature and didn’t heed the warnings in its path,” Dr Linkin wrote.

“We must not fall victim to this same mentality when addressing climate change. To ignore the warning signs Mother Nature is sending us, in the form of rising temperatures and seas, and disappearing ice, is foolish.”

The data on climate change is becoming harder to ignore. NASA’s Goddard Institute for Space Studies has reported last month was the hottest March on record.

The global temperature was 1.28 degrees warmer than the average from 1951-80, which is used as a baseline.

It was the six successive hottest month on record.