Decelerate carbonisation: The insurance technology challenge

The insurance industry was built as a means of safeguarding customers and their assets against the risk of loss or damage; however, the climate crisis is destabilising this notion as the likelihood of climate related risk increases. Climate related events such as wildfires, flooding and storms results in more expensive and frequent claims, lack of affordable insurance and economic loss, particularly to countries most vulnerable to climate change. Reuters has reported a 250% rise in insured losses relating to the climate crisis in the last 30 years, which may continue to rise as global temperatures increase also.

With 68% of insurance CIOs investing more in application modernisation this year than in 2022, this provides an opportunity for insurers to focus on digital sustainability to help combat climate change whilst improving their digital transformation strategies. 

While digital technology has mitigated the use of paper-based actions such as completing forms and copying documents, there is still an environmental cost with manufacturing devices, data centres and network infrastructure. Data centres are estimated to be contributing 2% of global greenhouse gas emissions, like the highly publicised emissions of the aviation industry.

Digital technology is at once currently part of the climate problem with emissions growing by 6% each year, but also part of the solution. Digital technology has an amplification effect like no other across industries, including the insurance.  

In line with the approaches of the Green Software Foundation’s goals to reduce carbon, we consider the following to be the primary areas to focus on to emit fewer greenhouse gases:

• Reduce waste by removing any unused assets from your code e.g. nearly 63% of all mobile websites leverage google fonts for which the assets are not minified. This means on a global scale energy is being wasted transmitting blank spaces. 
• Optimise for lower energy e.g., switching to the WebP image format from png/jpg can improve compression by between 25-34%. 
• Improve the UX design of your website or customer interface to make it quicker for users to find what they need. 
• Optimise for end-user devices e.g., switching colour schemes can under certain circumstances improve battery life on mobile devices by 47%. 

• Utilise green hosting operated with renewable sources of energy. 
• In migrating UN IoM (International Organization for Migration) to cloud, Kainos alongside our partner Microsoft, were able to reduce their Scope 2 GHG (Green House Gas) emissions by 92%, saving 594 tonnes of CO2e each year. 
• If you do not implement dynamic scaling or regularly right size your infrastructure, you will use more energy, incur more costs, and emit more CO2e. 

• Measuring your carbon footprint can be challenging with the lack of a definite methodology, however the Green Software Foundation’s Software carbon intensity specification can measure the carbon emitted per transaction (for example, a form submission). Kainos have also developed a Cloud Carbon Reduction Calculator which can help you easily see the carbon reduction impact that a cloud migration would unlock for your organisation. 
• Change your digital habits by challenging your current digital methods to be greener.