Climate Change Risk Management and Regulation of Services: Implications for the (Re-)insurance Industry
NCCR Trade Regulation Working Paper No. 2011/18, co-authored by Sofya Matteotti-Berkutova and Olga Nartova. Forthcoming in "The New Zealand Journal of Public and International Law, Vol. 10."
The project first investigates the complex link between financial services and climate change. Direct insurers, reinsurers, and national regulators all interact in a multilayered system that influences responses to climate change. The insurance sector itself is one of the largest institutional investors in the world, and changes in climate and weather patterns will influence insurers’ decisions on where to invest (in clean and energy efficient technologies, renewables etc.). The role of WTO seems to be neglected in this debate and research shows how using the doctrine of multilayered governance WTO can promote the reach of new innovative insurance solutions throughout the world and mainly to the developing and least developed countries that will suffer from climate change most. Within the WTO framework there is a potential to facili-tate the technology transfer to emerging/developing countries (insurance expertise in risk assessment and advising on risk prevention technologies). The research looks at current status of (re)insurance services liberalisation and level of commitments undertaken by developed and developing countries, trying to trace the changes that happened on the ground after this sector was liberalized. The question further arises to what extend a monopoly is allowed under GATT/GATS and EU legal framework and whether it would better serve the purpose of combating the climate change as opposed to the liberalisation. We conclude with identification of the future challenges that would need further thinking.