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Wednesday, October 1, 2008
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In its Sustainability Report for 2007, released in August, Santam said that international reinsurers generally believe that the local insurance industry is poorly prepared for the effects of climate change. In response to this the company has undertaken to intensify its efforts to understand climate change, to raise awareness, engage stakeholders and to take actions that will address the issue.

Ray-Ann Sedres, Integrated Sustainability Manager at Santam, says the company has adopted a high-level business plan and appointed a task team to deal with the impact of climate change, in line with its core business focus on risk management.
“We see is as our responsibility not only to protect our business, but to find innovative solutions to address the future threat of climate change,” she explains. “While we are used to the impact of cycles in both the economy and weather patterns on the balance between premiums and insured losses, climate change is different. More volatile climatic events create less certainty and lead to bigger claims, which inevitably result in more complex and higher pricing structures and the potential for certain risks and events to become uninsurable.”
While the environmental initiative launched by Santam envisages intensive collaboration between the company, government, industry partners and clients, Sedres says that the crucial starting point in dealing with environmental management and climate change is the Santam workplace itself.
“One of our first steps was to commission a survey during 2007 to estimate greenhouse gas emissions emanating from sources controlled directly and indirectly by the company, in order to better understand how we can measure the effect of initiatives designed to improve our own environmental impact.
“More importantly, we believe that every one of our employees must take complete ownership of these issues and look at ways and means of cutting down on travel, saving energy and water and actively participating in recycling initiatives, for example. Engaging with our employees and getting our own house in order is an essential pre-condition for engaging with our external stakeholders,” she says.
At the broader environmental management level, Sedres advises that the company has entered into a strategic partnership and sponsorship arrangement with The Enviropaedia, an environmental education facility for individuals and companies. The partnership provides Santam with access to a source of information and resources that will help to raise internal awareness, as well as a network of mutually supportive organizations that have a common interest in reducing exposure to environmental threats.
Environmental impact management, including the need to address the effects of climate change, is listed as one of ten material issues identified by a sub-committee of Santam’s Board of Directors as crucial to future sustainability. Sedres notes that in each case, initiatives are being undertaken that will not only benefit the business itself but make a positive difference to the fortunes of the country as a whole.
“By understanding and anticipating the effects of climate change on our business, for example, we will be better able to manage this risk and adopt creative sustainability efforts that will serve the needs of our clients and the broader community in which we operate,” she concludes.

Copyright © Insurance Times and Investments® Vol:21.9 1st October, 2008
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