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Insurers Unprepared for Global Warming

Insurers Unprepared for Global Warming

Most insurers are not prepared for climate change, according to a new study released by Ceres.

“Insurers invariably pay a big chunk of the losses from these changes in our climate,” said Mindy Lubber, president and CEO of Ceres, in a conference call sponsored by The Climate Reality Project. “They are substantial, and they are everywhere.”

According to the study, of 184 insurance companies doing business in California, New York or Washington state, only 23 were preparing to deal with global climate change; of those, 13 were based overseas.

Global warming is already beginning to make its effects felt, with more extreme weather events having an impact around the world. From droughts in Australia and the American South to unusual, catastrophic storms like Superstorm Sandy, it is becoming increasingly hard to ignore the dangers of a warming planet. In 2012, insurers paid out $58 billion in losses due to weather events, the second-highest on record. The largest loss also came within the last decade, in 2005.

Nevertheless, most insurers are still not preparing for climate change, which could ultimately cost them trillions of dollars.

“Many of them are fumbling in the dark, pricing risk with out understanding it,” said Charlene Leurig, who prepared the report for Ceres. Leurig said some insurers still doubt the reality of climate change.

“Companies including Allstate and The Travelers are expressing skepticism of climate change,” Leurig said.

Leurig said that not all insurers are dragging their feet. Reinsurance giants Munich Re and Swiss Re have been active in arguing for policy changes to mitigate the damage done by climate change, and Nationwide Insurance is factoring climate risk as part of its underwriting process.

Unfortunately, many of the insurers who are aware of global climate change are reacting by moving away from areas that are susceptible to climate change.

“We’re seeing an insidious trend of companies actually leaving markets, like Florida,” said Leurig. In that state, the State of Florida is now the largest insurer, putting taxpayers at risk should disaster strike.

While the insurance industry is not on the verge of bankruptcy, Leurig said that looking long-term, insurers could find themselves cash-strapped, and property-owners could find themselves unable to get insurance if they live in a high-risk area.

There is no doubt in the scientific community that global warming is real, and that it is caused by humans. A recent study indicated that the global average temperature is now warmer than at any time in the past 11,000 years — a period that covers the rise of civilization from the agricultural revolution to the modern era.

It is all but certain that the planet will continue to warm for some time. Even if the world went carbon-neutral tomorrow, carbon already in the system makes it likely that the world will warm another 2 degrees Celsius over the next century; as carbon emissions are still increasing, it seems likely the temperature increase will be much worse.

 

Related Stories

The Earth is the Hottest It’s Been in 11,000 years

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5 Signs the World is Really Ending

 

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Photo: U.S. Geological Society/flickr

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110 comments

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9:34AM PDT on Apr 13, 2013

I have come to the conclusion that we all have a little blame global warming and its consequences and guilt even more politicians who do not slow down.
http://www.globalwarmingweb.com/

7:45AM PDT on Mar 29, 2013

GLOBAL WARMING MAY NOT BE MAN MADE

Dr. Larry Vardiman (scientist and physicist) of the Institue for Creation Research says:

"One possible scenario may be found in a recent series of articles by Henrik Svensmark and Nigel Marsh, cosmic ray specialists from Denmark, who have shown an indirect connection between galactic cosmic ray (GCR) intensity and global temperature.7,8,9 They are studying the influence of the Sun on the flow of GCR to Earth. The Sun's changing sunspot activity influences the magnetosphere surrounding the Earth permitting more GCR to strike the Earth during high periods of activity.

When the Sun is active, the intensity of GCR striking the Earth is increased, causing more ionization in the atmosphere, creating more carbon-14, and possibly creating more cloud condensation nuclei (CCN). This increase in CCN, in turn, appears to create more low-level clouds which cool the Earth. When the Sun is quiet the GCR intensity striking the Earth is reduced, allowing the Earth to warm. Svensmark and Marsh have shown a striking statistical correlation between sunspot activity and global cooling and warming over the past 1000 years.

The recent rise in global temperature may partially be due to current low solar activity supplemented by a recent increase in carbon dioxide concentration measured at Mauna Loa. The connection which still needs further study is the production of CCN and clouds by GCR."

There is a good deal of science showing that global warming

5:59AM PDT on Mar 29, 2013

Thanks for the article :)

5:54AM PDT on Mar 29, 2013

Maybe they don't believe in global warming?

5:52AM PDT on Mar 29, 2013

very sad

3:48AM PDT on Mar 29, 2013

Very sad! Thanks

7:39PM PDT on Mar 28, 2013

Eeeks. Looks like they aren't spending all of those profits they are making off of ALL of us very well ... or are they?

12:32AM PDT on Mar 28, 2013

Very sad that a lot are still in denial as well because many people are going to suffer and we should be ready!!

12:08AM PDT on Mar 28, 2013

It's been a fact that insurance companies want clients they'll never have to refund. It's business and money. So, how much of a surprise could their desertion of some markets be?

9:04PM PDT on Mar 27, 2013

Yeah, it's a shock, blah

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