Francis Bouchard, Managing Director of Climate for Marsh McLennan, recently interviewed Roy Wright, CEO of the Insurance Institute for Business & Home Safety (IBHS), to discuss the future of insurance in the age of climate change and the importance of product innovation.
The majority of U.S. infrastructure is funded, built, and maintained by city councils, county boards, and state legislatures. But aging infrastructure, escalating climate risk, and other factors are converging to leave local communities less prepared to absorb their growing risk.
A smart transition of FEMA toward state and local disaster responsibility would encompass 1) reform to the Stafford Act to rebalance federal and state contributions, 2) a restructuring of state disaster relief funds, and 3) a shift toward regionalization of disaster response.
The muni bond market presents an opportunity to finance resiliency in a way that aligns policy-makers, community stakeholders, business interests, and investors. By strengthening local infrastructure to render assets less vulnerable to climate shocks, it can reduce disaster costs for communities.
