Economic losses from natural disasters increase year by year
We deem it our social responsibility to maintain and sustain insurance underwriting against contingencies such as natural disasters.
Climate change poses a top-level risk to the entire world. Economic losses caused by natural disasters, such as hurricanes, floods, droughts and wildfires, have been increasing on a long-term basis. For 2020, economic losses caused by disasters are estimated to total 202 billion US dollars, of which the loss of 190 billion dollars is attributable to natural disasters.
The momentum for carbon neutrality has been expanding globally, but even if we can truly go carbon neutral by 2050, the global average temperature will still rise from the present level, further increasing the frequency of natural disasters.
Amid such dire circumstances, we have a social responsibility to provide insurance services, including those against natural disasters. In order to deliver safety and a sense of security to customers as an insurer, we regard the solution of climate change as our top priority. We believe that it is important to realize the sustainability of our company and society at the same time.
Chart: Sigma No 1/2021 p24 Quoted from Figure 15 Insurance damages due to disasters from 1970 to 2020
Source: Swiss Re Institute
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climate change
Facing the risks posed by Climate Change
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Things that we can do against Climate Change
Torrential rains and floods, which used to happen only once in several decades, now occur almost every year. Moreover, typhoons, forest fires, droughts, heat waves, rising sea levels and other phenomena that are thought to have been caused by climate change are hitting regions across the world with greater intensity. Global warming is said to be causing these global weather disasters, and scientific evidence indicates that global warming is indisputably attributable to human activities. In the face of climate change, people are required to reform their lifestyles and companies their management styles. If we consume natural resources without limit for economic activities or pursue development activities that exploit nature to excess, deforestation, loss of biodiversity and damage to water resources will be the result. These social issues are interrelated, and we need to address them in a concurrent manner.
Reasons Why We Are Implementing Climate Change Countermeasures
For the sustainable provision of services as an insurer
Non-life insurance provides vital support to society and the economy.
Climate change has a tremendous impact on the sustainability of the non-life insurance business itself and is thus an issue that we are addressing as our top priority.
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Measures to Address and Solve
Issues Related to Climate Change,
Natural Capital and Biodiversity
The Sustainable Development Goals (SDGs) include a range of goals, such as eradicating poverty and hunger, the achievement of gender equality and sustainable economic growth. It can be said that the establishment of a stable climate system and a sound natural environment will provide a foundation for their achievement. Mitsui Sumitomo Insurance is committed to supporting a transition to a decarbonized society (for climate change mitigation) as a financial institution and is also committed to reducing social losses caused by climate change (for climate change adaptation) as a non-life insurance company. Climatic stability is supported by sound ecosystems that maintain biodiversity. The loss of abundant forests and oceans not only reduces the absorption of greenhouse gases, but also causes further damage to the natural environment due to extreme weather events such as heat waves and droughts. In view of this, it is necessary to consider climate change and the natural environment as one. For the realization of a resilient and sustainable society, Mitsui Sumitomo Insurance is implementing measures to protect and recover natural capital and biodiversity while also fostering measures against climate change.
Climate Change Mitigation
For the transition
a decarbonized society
MODAL FADE IN
Climate Change Adaptation
Enhancement of resilience
against disaster caused by climate change
MODAL FADE IN
Improvement of Sustainability
of Natural Capital
Climate change mitigation and
adaptation through biodiversity conservation
and the utilization of ecosystems
MODAL FADE IN
The SDGs wedding cake
Azote for Stockholm Resilience
Centre, Stockholm University
Towards a Carbon Neutral Society
Mitsui Sumitomo Insurance addresses the risks posed by climate change to the economy and society and supports a transition to a decarbonized economy, which is our purpose. We will provide products and services that contribute to a transition to a decarbonized society, reduce greenhouse gas emissions across our investment and financing portfolio, and are committed to achieving net-zero for greenhouse gas emissions caused by our business activities by FY 2040.
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MS Green Index
Progress with Related Measures
We set the MS Green Index to indicate our progress with the measures to achieve net-zero emissions by 2050, specifically those related to insurance underwriting, investment and financing activities, and our business operations.
Green Underwriting/Services
(Green Products and Services)
As our mission as a non-life insurance company, we will develop insurance products (“green products”) that contribute to the decarbonization of society and conservation and restoration of natural capital and biodiversity and will also provide products for renewable energy-based power generation equipment and electric models, such as electric vehicle (EVs) and fuel cell vehicles (FCVs) (“green underwriting”) for the creation of a carbon neutral economy, while also achieving our own sustainable growth and increasing our corporate value. For green products, we will expand the lineup and for green underwriting we aim to achieve CAGR of 18%.
  • Insurance to support the stable supply of Green Power Certificates
    Green Power Certificate is issued by purchasing the environmental added value of electricity generated by renewable energy from an issuer certified by a third party certification organization. When a facility of a green power generator is shut down due to a disaster or other trouble, additional costs incurred by the issuing company temporarily procuring the environmental value of green power from other generators are compensated.
  • Auto insurance “EV charging equipment damage coverage special clause”
    It is a special agreement to support the spread of electric vehicles (EVs) toward the realization of a decarbonized society. Compensation for damage to EV charging facilities and replacement charging costs incurred while the damaged EV charging facilities are unavailable. Through the provision of these special agreements, we will support an environment in which businesses that use EVs (such as car-sharing businesses) can introduce EVs with confidence and continue to use them.
  • Carbon Neutral Support Clause for Corporate Property Insurance
    In terms of corporate property insurance, we launched the Carbon Neutral Support Clause in August 2021. This special clause provides coverage for extra costs in installation of devices that lead to emission reduction to repair damaged buildings, etc. While standard insurance coverage is up to restoration cost, this clause provides additional coverage and supports companies’ decarbonization.
  • Rental car cost rider for electric vehicle rental based on disaster assistance agreement
    A disaster support agreement under which electric vehicles owned by businesses are leased to local governments as emergency power sources in the event of a disaster. The special agreement covers rental car expenses incurred when an electric vehicle is lent to a local government based on the agreement and an alternative rental car is arranged. In addition to supporting the establishment of regional cooperation systems in the event of a disaster, we will encourage the effective use of electric vehicles, thereby supporting the spread of electric vehicles.
  • Comprehensive coverage plan for mega-solar power generation
    We provide operators of mega solar power generation facilities with a compensation plan that packages fire insurance (for property and for loss of profits), liability insurance and a weather derivative to compensate for a decrease in income due to a shortfall in hours of sunshine. This plan covers the major risks that could hamper the smooth operation of business, thereby supporting the safe and stable operation of mega solar power generation facilities.
  • Comprehensive small wind power coverage plan
    We offer this plan to operators of small windfarms. It comprehensively provides compensation for property damage and liability insurance. Wind power generation is low-cost compared to other renewable energy-based power generation, and small windfarms in particular do not need a vast amount of space and are therefore easier to establish. In order to help boost the number of small windfarms, we are providing compensation for a wide range of losses through this plan.
  • Comprehensive offshore wind power generation system coverage
    Against the risks posed to operators of offshore windfarms with regard to the construction and operation of the facilities, we provide comprehensive compensation in an insurance package composed of insurance against damage to property and loss of profits along with liability insurance. Also, we visualize, analyze and assess the risks involved in offshore wind power generation to support the operators in risk reduction at each stage of business.
  • Comprehensive compensation plan for geothermal power generation facilities
    This compensation plan extensively covers the risks posed to operators of geothermal power generation facilities, including the risks of damage to property and loss of profits as well as liability risk. We can undertake these risks according to the needs of individual customers. Through the provision of this plan, we will support the introduction of geothermal power generation facilities, which can be operated in a stable manner regardless of weather conditions.
  • ※1 For green products, renewable energy-based power generation facilities and electric models, such as electric vehicles (EVs) and fuel cell vehicles (FCVs)
Green Investment
(ESG investment)
By 2050 we will achieve net-zero GHG emissions for all investment portfolios. Through investment and financing, we will support companies that are embracing the challenge of developing innovative technologies for the substantial reduction of GHG emissions. Also, based on constructive dialogues with the investee companies, we will work with them to foster a transition to a decarbonized society. By FY 2025 we will enhance engagement with those investee companies that account for more than 70% of GHG emissions in our shareholding portfolio※1. Furthermore, by promoting impact investment, we will contribute to the achievement of the SDGs and the creation of a sustainable society.
Green Operation
(Environmental impact reduction measures in our business activities)
We will achieve net-zero for greenhouse gas emissions caused by our business activities (Scope 1 + 2 emissions) by FY 2040 and will also achieve net-zero for Scope 1 + 2 + 3 emissions by FY 2050. In order to attain these targets, we have set an interim target for FY 2030, which is to reduce the emissions by 50% compared to FY 2019 levels. For the creation of a carbon neutral society, we also need to reduce CO2 emissions across the value chain. Accordingly, we will work with our customers, agents and other stakeholders for emissions reduction. Moreover, we will enhance climate change-related training for employees to help them increase their awareness about the importance of fostering decarbonization.
  • Scope1+2 ▲24%
    Scope3 (1,3,5,7,13) ▲19%
  • Scope1+2
  • ※3 The number of our employees who took a business design course on climate change in the MS & AD Digital Academy program in partnership with Toyo University Faculty of Informatics (INIAD) + The number of in-house seminar participants

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