Why climate change is now top concern for risk experts and the public

A new report published by  AXA reveals that climate change is the top concern for both risk experts and the public in the UK. The findings come at a time when  AXA has joined the UN Race to Zero campaign, committing to achieve net zero carbon emissions by 2050.

From a possible 25 risks that could impact the world within the next decade, more than two thirds (64 percent) of UK risk experts and almost six in 10 (59 percent) of the UK population ranked climate change as their highest risk. This was in line with Europe which also ranked climate change as the top risk, with more than half (53 percent) of the overall European population and 62 percent of experts ranking it accordingly. Globally, experts agreed that climate change has the potential to have the biggest impact on society in the next five to 10 years, however, the wider global public see it as the second most concerning risk, behind pandemics and infectious diseases.

The findings are revealed in this year’s AXA Future Risks Report, a global study which measures and ranks changes in the perception of emerging risks via a survey of 3,500 experts and 19,000 members of the public. The report is produced in partnership with research institute IPSOS and geopolitical analysis consultancy Eurasia Group.

When it comes to who is best placed to deal with risks like climate change, the study shows that, on a global level, people believe governments are underprepared to tackle the challenge, with just one in five (19 percent) of experts saying that public authorities can help mitigate the climate crisis and only a third (32 percent) of the UK public agreeing that governments are well prepared.

However, the report also reveals that almost six in 10 (57 percent) of the UK’s general population think globalisation has a positive impact on risk, since it unites countries to fight against risk more effectively. The UK ranks highest in terms of feeling positive about the impact of globalisation compared to the rest of Europe, with only the Swiss also feeling more positive than negative.

The report shows that people feel governments need to do more to mitigate climate and environmental risks. It’s also clear that the insurance industry can play a larger and more visible role in making meaningful and sustainable changes. In recognition of this, AXA has joined the United Nations-backed Race to Zero campaign and committed to reach net zero carbon emissions by 2050.

The Net-Zero Insurance Alliance, chaired by AXA, is providing businesses, governments and other key players the chance to work collaboratively to tackle the challenges. The upcoming COP26 event will also provide a good opportunity for governments and insurers to work together to deliver solutions and help facilitate change.

Meanwhile, the UK public ranked pandemics and infectious diseases (57 percent), and new security threats and terrorism (39 percent) as their second and third top risks respectively.

Overall, the UK ranked risks associated with climate, pandemics, cyber security, pollution, security threats and chronic illness higher than the rest of the world.  Compared to five years ago, 90 percent of UK experts and 83 percent of the UK population said they felt more vulnerable in the world due to emerging risk factors.

“At a time when life has been dominated by other important issues, such as the COVID-19 pandemic and economic instability, it is perhaps surprising that climate change would top the list,” said Claudio Gienal (pictured), CEO, AXA UK and Ireland. “However, this clearly demonstrates that for many people climate change is a very real risk which is fast approaching, if not already upon us. There is no doubt that climate change is one of the most serious and damaging risks we as a global population face, so it’s encouraging that this has been acknowledged as the number one risk in the UK.

“We have a real opportunity here for everyone – governments, the private sector and individuals – to come together and work more closely to help mitigate the risks we face now and in the future.

“That’s why it’s great to see the insurance industry stepping up with the launch of the Net-Zero Insurance Alliance, and we’re delighted to join the UN-backed Race to Zero campaign. Insurers have an essential role to play and AXA stands ready to play our part.”

Sean McGovern, CEO, UK & Lloyd’s market at AXA XL, added: “The message from this report is clear. UK risk experts and the broader population believe the UK Government needs to put climate change front and centre.

“London is recognised around the world for its insurance and risk expertise and is renowned for its experience in addressing the most complex, emerging risks. It has a dual role to play; both by supporting our clients and local communities in tackling the immediate impacts of climate change and – through the work being done within the London market and Lloyd’s – by helping to create climate resiliency around the world. This is an opportunity that we cannot afford to miss. Central to this is tackling the protection gap – the gap between economic and insured losses – and insuring the green transition as we move to a decarbonised world.”

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