From Protection to Growth Engine – Insurance as a Strategic Business Enabler Driving the Climate Transition – Podcast

In a recent episode of the BritCham Podcast,  Anthony Hobley, Daniel Fairweather, and Charlie Pool  from Howden explain how forward-thinking businesses are transforming their approach to risk management—moving beyond traditional coverage to unlock new financing opportunities, reduce capital costs, and gain competitive advantages in an increasingly unpredictable climate.

As a business leader, you likely know your business expenses six months' out. You've hedged your freight costs for the next quarter. Every critical commodity that keeps your business running has been priced to keep your cash flow running.

Insurance is more than a financial safeguard; it’s a strategic lever for business resilience. Yet too often, it only enters the conversation weeks before renewal. For something so critical, shouldn’t it be part of the bigger picture all year round?

According to Anthony Hobley, Deputy Chair for Climate Risk & Resilience at Howden, this traditional and reactive approach is costing businesses dearly. "If I were a CFO, I would be asking: why can't I have a forward price curve on my insurance and asset insurability over the next 8 to 10 years?"

The Hidden Growth Engine: Unlocking Capital Through Insurance Innovation

The insurance industry has moved beyond protecting and role in picking up the pieces after a disaster, to becoming a critical enabler and catalyst for business growth and innovation. Most companies are still underutilising its capacity and power. 

One example is the use of parametric insurance in wind energy development. Historically, developers faced challenges securing financing due to concerns around wind variability. This unpredictable factor directly impacts power generation and revenue stability. To address this, An international reinsurer, worked with a specialist company to provide a parametric insurance solution that triggers payouts when wind speeds drop below predefined thresholds. By providing a minimum level of revenue certainty, the solution enabled more reliable financial projections, enhancing the bankability of the project. This innovation allowed these developers to dramatically increase their borrowing capacity and move forward with development.

" While paying premiums is a necessary cost, insurance plays a far more strategic role than mere protection," Hobley explains. "It acts as a financial enabler, unlocking cash flows and investment opportunities that would otherwise remain out of reach, ultimately helping to lower the overall cost of capital. "

The Asian Challenge: Double the Risk, Double the Opportunity

For businesses operating in Asia, the stakes are even higher. Daniel Fairweather, Head of Food Security Systems & Biodiversity at Howden, points out a sobering reality: "When we talk about 1.5 degrees of warming globally, that's an average. In Asia, we're probably going to see double that." This is supported by the World Meteorological Organisation (WMO)’s 2024 report [1], which confirms that Asia is warming at almost twice the global average, driven by rapid land and sea surface temperature increases.

This isn't just an environmental concern – it's a business reality that's already reshaping entire industries. From supply chain disruptions to workforce productivity challenges, the physical risks are mounting. But so are the opportunities for companies that get ahead of the curve.

"We're seeing climate risk become so systemic that it's impacting everything at once," notes Fairweather. "The traditional approach of managing risk through supplier diversity isn't enough anymore, especially as extreme weather events such as flooding, storms, droughts or heatwave can affect entire regions simultaneously."

Technology Guarantees: De-risking the Energy Transition

One of the most intriguing examples of insurance enabling innovation comes from the technology sector. Charlie Pool, Head of Carbon Advisory at Howden, describes how they've repurposed an old solution for new purposes: the technology performance guarantee.

"We've worked on it in the direct air capture space," Pool explains. "It guarantees a certain level of output from emerging technologies, removing key blockers for investors." Startup companies working with new technology benefit from access to debt financing, reducing reliance on venture capital which dilutes the value of ownership among founders and early investors.

The brilliance lies in the structure. Instead of having investors absorb the full risks of being first backers of an emerging technology, they're essentially derisking by lending against A-rated insurance backing. It’s a clear demonstration of how insurance, when strategically deployed, can unlock capital and transform entire markets.

The Government Partnership Advantage

What makes this particularly relevant for Singapore-based businesses is the government's proactive approach. Howden is working with the Monetary Authority of Singapore (MAS) to build a centre of excellence in the region and globally, recognising that climate risk management requires coordination between public and private sectors.

"Singapore is one of the most progressive places in the world when it comes to thinking about regulatory innovation in insurance," says Hobley. This creates unique opportunities for businesses operating in the region to access cutting-edge risk management solutions.

The Call to Action: Demand More

Perhaps the most important insight from this conversation is that change requires demand from both sides. "Like any business, the insurance industry responds to what clients ask for," notes Pool. "You need to be asking for more."

Beyond better coverage, businesses should be viewing insurance as a strategic business tool. Companies that make this shift can access new markets, reduce their cost of capital, and build more resilient operations.

In a world that’s increasingly unpredictable, insurance can serve as a competitive advantage waiting to be unlocked. The question is whether businesses will begin to demand more from their insurer before their competitors do.

This article was first published on British Chambers of Commerce Singapore.

Ready to transform your approach to business risk and opportunity? Watch the full podcast episode with Daniel Fairweather, Anthony Hobley, , and Charlie Pool from Howden to how insurance can serve as a strategic enabler. It can help unlock capital, support innovation, mitigate and manage risks and drive resilience. 

References:
^{1 https://wmo.int/media/news/rising-temperatures-and-extreme-weather-hit-asia-hard}

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