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Author Topic: Insurance Industry Policies and Climate Change  (Read 27921 times)

bluesky

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Bob Wallace

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Re: Insurance Industry Policies and Climate Change
« Reply #51 on: December 31, 2014, 09:27:54 PM »
Quote
I am very doubtful that the insurance industry will be a powerful trigger for rapid policy change

The role that insurance companies will most likely play is setting high rates for properties at risk from sea level rise and extreme weather.

As flood, storm, and crop loss insurance becomes more and more expensive it will help get across the message that bad stuff is coming.

bluesky

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Re: Insurance Industry Policies and Climate Change
« Reply #52 on: December 31, 2014, 10:12:19 PM »
Agree, but it might happen too late, unless a big catastrophe something like a 1/500 years event as per the insurance cos model (but probably something like a 1/100 or 1/200 years event including climate change impact), hurricane or flood or windstorm happens in the US or Western Europe or Japan within the next few years, the earlier the better, if it happens somewhere else in the world, insurance cos do not have a significant exposure to trigger policy change. Considering the chaotic variability of weather within a time span of a few years (e.g. el Nino reduce the hurricane frequency and intensity in the Atlantic due to higher vertical wind shear), this is like playing dice, we cannot afford to play dice regarding the urgency to reduce our CO2 emission especially with oil price going further down (this evening at 53 USD),  so do not think too much about insurance pricing impact it may happen far too late....
« Last Edit: December 31, 2014, 10:34:32 PM by bluesky »

Bob Wallace

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Re: Insurance Industry Policies and Climate Change
« Reply #53 on: January 01, 2015, 12:40:12 AM »
US insurers are already making adjustments.  As early as 2003 some insurance companies quit writing policies in places where things like higher sea levels/storm surges increased risk.

http://insurance.lbl.gov/availability-affordability.html

No one is saying that insurance company policies alone will make the difference, but some people are getting the message that risks are not what they used to be and they will tell others.  It's one more message feed-in that raises awareness and, hopefully, motivation to do something.

sidd

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Re: Insurance Industry Policies and Climate Change
« Reply #54 on: January 01, 2015, 01:04:42 AM »
"I was surprised to read a study from Standard and Poor's earlier this year, stating that re insurance do not include climate change neither in their catastrophe modelling nor in their pricing"

And this is why my ohio friends do not trust reinsurance. Recall what happened to MBIA and PMI in the late realestate crash.

The ohio boys think the 3 big cat modellers are underestimating tail risk, possibly since they are being paid to do so. They remember what the rating agencies told em about realestate a few years ago. Their homegrown cornfed statisticians are telling em differently.

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AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #55 on: January 14, 2015, 11:46:18 PM »

The linked article discusses an interview hosted by Bill Moyers about a climate change lawsuit:

http://www.commondreams.org/news/2015/01/02/citing-next-generations-lawsuits-demand-courts-recognize-mind-blowing-climate
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Laurent

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Re: Insurance Industry Policies and Climate Change
« Reply #56 on: January 24, 2015, 06:53:03 PM »
Climate change: How to recruit the insurance industry for the battle
http://crosscut.com/2015/01/22/climate/123693/insuring-against-climate-change-how-state-can-step/

Quote
But if insurance companies aren’t prepared to deal with increasing climate disasters, who will be left with the bill? You, me, and our fellow taxpayers.

AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #57 on: February 27, 2015, 07:43:03 PM »
The linked article indicates that the use of models for forecasting climate change related insurance losses is on the cusp of major expansion; nevertheless, such forecasts will not be particularly precise in our lifetimes:

http://www.insurancejournal.com/news/national/2015/02/26/358760.htm
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Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #58 on: March 04, 2015, 02:45:21 AM »
Insurance industry investments under fire:
Bank of England warns of huge financial risk from fossil fuel investments
Global action on climate change could cause insurers’ investments in fossil fuels to take a huge hit, says bank’s prudential regulation authority
http://www.theguardian.com/environment/2015/mar/03/bank-of-england-warns-of-financial-risk-from-fossil-fuel-investments
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AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #59 on: March 11, 2015, 06:12:08 PM »
The linked article discusses climate change risks to the insurance industry:

http://www.rtcc.org/2015/03/11/climate-one-of-top-risks-facing-insurance-industry-mark-carney/
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AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #60 on: March 25, 2015, 04:10:43 PM »
The linked article indicates that if insurance companies were to withhold coverage to coal producers that could deliver a hammer blow in the fight against GHG emissions:

http://www.rtcc.org/2015/03/25/insurers-told-to-pull-cover-from-coal-companies/
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AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #61 on: April 22, 2015, 12:09:25 AM »
The linked report indicates that the insurance industry recommends that the US spend more money on pre-disaster mitigation efforts and infrastructure protection(largely due to concern about climate change) .

http://www.smartersafer.org/wp-content/uploads/Bracing-for-the-Storm.pdf
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Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #62 on: April 26, 2015, 12:56:06 AM »
ThinkProgress article on the SmarterSafer report linked by ASLR above.

Big Insurance Companies Are Warning The U.S. To Prepare For Climate Change
Quote
“With the federal government taking on such an enormous share of the financial burden and nearly all recovery responsibility, there is little incentive for disaster-prone states to take action to reduce risk,” the report says. “For example, disaster-prone states like Texas and Louisiana are among those spending the least of their state budget on emergency response and mitigation programs that can reduce disaster costs.”

The report suggested changing FEMA’s payment system so that states that have taken the most mitigation and preparation efforts are rewarded with more federal aid when disasters strike. “[R]ather than simply writing a blank check after every disaster,” it says, “disaster assistance must be provided on a sliding scale so that communities can get a full share of funding only if they have taken significant steps to protect its residents from harm.”
http://thinkprogress.org/climate/2015/04/21/3649244/insurance-climate-change-disaster-relief/
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oren

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Re: Insurance Industry Policies and Climate Change
« Reply #63 on: April 26, 2015, 08:00:03 AM »
It seems to me that the main people who should be worried about rapid climate change and its associated societal collapse are those selling life insurance policies. These are typically sold for long periods of time, sometimes even for several decades. The property insurance guys sell 1-year policies, no wonder they are not worried

Laurent

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Re: Insurance Industry Policies and Climate Change
« Reply #64 on: April 26, 2015, 09:07:47 AM »
Well they should be worried ! What does happen when you are really serious when reducing your consumption, you are looking at your bills. The insurances are on the top of the things you have to remove because it does suck a lot of your energy. That energy sucked out of you is pure CO2 going into the atmosphere (I know it is a bit streched).

Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #65 on: April 26, 2015, 05:17:35 PM »
Pricing for life insurance, at least in the US, is based on actuarial tables of population experience. If a block of business begins to show a greater than average loss, most policies contain a clause to lets them raise premiums on the entire block.  If the company can identify specific factors leading to early death, they can inquire about that when people apply for new life insurance, and charge extra for it.

Property and casualty insurance is commonly repriced every year, or even more often, as needed. 
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sidd

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anotheramethyst

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Re: Insurance Industry Policies and Climate Change
« Reply #67 on: June 03, 2015, 07:47:05 AM »
while that's true, most large-ish storms might kill a small amount of people, but can still cause hundreds of thousands or millions in property damage.  you have to remember property insurers get a much larger number of claims in a storm.  just look at the figures for any storm.  x people killed, y people injured, and z millions in property damage.  all those types of insurers pay out large amounts in claims during a catastrophe.  and the insurance business requires very accurate statistics and future projections.  i would not be the least bit surprised if that cook county lawsuit (not far from here, i live nw of chicago in mchenry county) was more to send a message that a municipality CAN get sued for infrastructure failures caused by climate change, because any community that decides to improve infrastructure because of their lawsuit could save them hundreds of thousands easy.

Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #68 on: June 09, 2015, 07:48:38 PM »
while that's true, most large-ish storms might kill a small amount of people, but can still cause hundreds of thousands or millions in property damage.  you have to remember property insurers get a much larger number of claims in a storm.  just look at the figures for any storm.  x people killed, y people injured, and z millions in property damage.  all those types of insurers pay out large amounts in claims during a catastrophe.  and the insurance business requires very accurate statistics and future projections.  i would not be the least bit surprised if that cook county lawsuit (not far from here, i live nw of chicago in mchenry county) was more to send a message that a municipality CAN get sued for infrastructure failures caused by climate change, because any community that decides to improve infrastructure because of their lawsuit could save them hundreds of thousands easy.

More on that, posted in the Legal thread:
Can Local Officials Who Ignore Climate Change Risks Be Sued?
The act-of-god defense for extreme weather impacts is being challenged in court
http://www.scientificamerican.com/article/can-local-officials-who-ignore-climate-change-risks-be-sued/
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sidd

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Re: Insurance Industry Policies and Climate Change
« Reply #69 on: June 09, 2015, 09:17:39 PM »
Mr. Sigmetnow posted this in another thread, but it is relevant here:

1) Coal giants may lose right to self insure against clean up:
http://www.reuters.com/article/2015/06/04/usa-coal-bonding-idUSL1N0YC17N20150604

From the previous, a link:

2) Arch Coal already lost that in Wisconsin.
http://www.reuters.com/article/2015/05/29/alpha-ntrl-resc-insurance-idUSL3N0YK5AS20150529

And from the latter, a previously added straw to their burden:

"The news comes a day after a Delaware judge asked Alpha Natural to pay for the legal defense of Donald Blankenship, the former chief executive of its unit Massey Energy Co who is facing a criminal trial over a coal mining disaster in 2010."

sidd

sidd

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Re: Insurance Industry Policies and Climate Change
« Reply #70 on: June 09, 2015, 09:22:28 PM »
Thanx for the article about the Chicago lawsuits. The article also sheds some light on the quick withdrawal of the Farmer's Insurance lawsuit:

" ... the political and internal pressures became too great ..."

That accords with my understanding. Fone calls came down from Wall Street, DC and Chicago, and the fix went in. Just like point shaving in basketball ... except there the calls come in from Vegas ...

sidd

Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #71 on: September 30, 2015, 01:54:22 AM »
Quote
@billmckibben: Wow! Governor of Bank of England describes massive risk of stranded fossil fuel assets, 'huge exposure' of investors http://t.co/GbXgIh17C3

https://twitter.com/billmckibben/status/648978622125113344
Breaking the tragedy of the horizon – climate change and financial stability
Speech given at Lloyd's of London
http://www.bankofengland.co.uk/publications/Pages/speeches/2015/844.aspx
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Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #72 on: October 19, 2015, 07:59:32 PM »
From February 13, 2015:
First Ethiopian Farmers Buy Insurance Against Drought
More than 5,000 sign up for JICA's first Weather Index Insurance scheme
http://www.jica.go.jp/english/news/field/2014/150213_01.html


Edit: 
Quote
@EricHolthaus: Biggest issue is: Ethiopian subsistence farmers shouldnt pay full cost of drought insurance when climate change is caused by rich countries.

https://twitter.com/ericholthaus/status/656162747176976384
« Last Edit: October 19, 2015, 09:07:01 PM by Sigmetnow »
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Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #73 on: October 19, 2015, 09:13:44 PM »
UNFCCC: Risk management approaches to address adverse effects of climate change - Insurance
Quote
According to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), there was a rapid increase in weather related disasters worldwide between 1980–- 2003.  The report estimates the economic losses due to damage caused by natural disasters totaled USD 1 trillion during that period.  While natural disasters rose sharply worldwide over the last two decades, the hardest impacted were low income developing countries, where over 95% of deaths occurred due to natural disasters.

Many Developing countries, particularly SIDS and LDCs, are unable to afford the economic cost of disasters due to their difficult socio-economic situation.  Impacts are often exacerbated by poor emergency response capabilities and unsystematic disaster management programs.  Socio-economic baseline trends indicate that major challenges can already be expected in developing countries that will be exacerbated by climate change.
http://unfccc.int/cooperation_support/response_measures/items/4971.php
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AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #74 on: November 02, 2015, 08:24:21 AM »
The linked article indicates that the insurance industry has taken the lead in the private sector's efforts to fight climate change:

http://www.newrepublic.com/article/123212/who-will-pay-climate-change

Extract: "Study after study has concluded that private investment, if efficiently deployed, would outpace anything that governments could spend on climate change—and actually might meaningfully reduce the problem while preserving corporate profits. "This economic transition toward climate compatibility requires a redeployment of global investment the likes of which the world has never seen," Achim Steiner, executive director of the United Nations Environment Program, said in a July speech in Luxembourg. "It's not about public money," added Connie Hedegaard, the European Commission's former top climate official, at a forum in Sydney in August. "It's about how you can spend public money in a way that leverages private investment."

Insurance companies are the canaries in the coal mine of global finance: When noxious economic winds blow, they are the first to get sick. Global insurance industry losses from weather-related claims, according to Munich Re, jumped from an inflation-adjusted annual average of $10 billion during the 1980s to $50 billion in this decade. It is, of course, impossible to determine what percentage of that increase is due to climate change. But Munich Re's Hoeppe called a surge of that magnitude "striking," and he said the company is planning for a future in which climate change is at the very least a factor in increased claims. Other major insurers widely share this view."
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AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #75 on: January 14, 2016, 06:00:27 PM »
If handled well microinsurance could reduce the coming impact of climate change.  If handled poorly, then microinsurance could rob Peter to pay Paul, resulting in more severe climate consequences once the microinsurance industry is overwhelmed by unexpectedly high climate consequence (circa 2050):


http://www.greenbiz.com/article/microinsurance-and-new-market-climate-equity


Abstract: "Much of the talk about climate change adaptation has focused on investment — in things such as stronger infrastructure, renewable energy, microgrids and disaster response capabilities. But another area could be just as important in helping communities in the developing world bounce back from climate change impacts: insurance.



Microinsurance is a "means of protecting low-income people against specific risks in exchange for a regular payment of premiums whose amount is proportional to the likelihood and cost of the relevant risk," according to the Microinsurance Network, a microinsurance nonprofit.
The primary distinction from conventional insurance is in the targeting of low-income people, which leads to distinct characteristics and objectives, including addressing the particular risks of poor people, affordability and accessibility, among others.
And this is a growth market: From 2007 to 2013, the microinsurance industry expanded from an estimated 78 million clients to more than 263 million, said the Microinsurance Network. In the same period, total demand increased more than 10 percent per year, and premium growth surpassed that in the developed markets."
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Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #76 on: February 27, 2016, 09:43:06 PM »
Read between the lines of Warren Buffett's annual letter, which notes he has "deemphasized catastrophe coverages."

Warren Buffett's Shareholder Letter, Annotated
Your user's guide to the great investor's views on the economy, insurance, M&A, and more.
http://www.bloomberg.com/news/features/2016-02-27/warren-buffett-s-2015-shareholder-letter-annotated
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AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #77 on: February 29, 2016, 08:09:15 PM »
Read between the lines of Warren Buffett's annual letter, which notes he has "deemphasized catastrophe coverages."

The linked article indicates the Warren Buffett in particular, and the insurance industry in general, is transferring climate change risk to taxpayers:

http://www.huffingtonpost.com/entry/warren-buffett-climate-change_us_56d36cade4b03260bf773563


Extract: "In his annual letter to investors in his conglomerate Berkshire Hathaway, the billionaire investor fought back against a proposed shareholder resolution demanding his insurance subsidiaries measure and disclose the risks that climate change poses to their business and how the company is responding to the threat. Buffett compared fears over climate change to the brouhaha around apocalyptic Y2K predictions.
..
Insurance companies caught unprepared for the effects of climate change could cause problems for government officials and put taxpayers at risk.
For example, governments may have to cover markets that insurers dump as a direct result of climate change, the Bank of England chief said, putting taxpayers on the hook."
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AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #78 on: April 17, 2016, 06:07:38 PM »
With a hat-tip to Greenbelt's post in the "Sea Level Rise" thread, the linked article discusses how NOAA notified the insurance industry  that sea level could rise by 3m in the 2050-2060 timeframe due to instabilities in the WAIS.  This will allow the insurance industry to time increases in their premium so that they are not hurt by climate change:

http://www.insurancejournal.com/news/national/2016/04/12/405089.htm

Extract: "Think sea level rise will be moderate and something we can all plan for? Think again.
Sea levels could rise by much more than originally anticipated, and much faster, according to new data being collected by scientists studying the melting West Antarctic ice sheet – a massive sheet the size of Mexico.
That revelation was made by an official with the National Oceanic and Atmospheric Administration on Tuesday at the annual RIMS conference for risk management and insurance professionals in San Diego, Calif.
The conference is being attended by more than 10,000 people, according to organizers. It was day No. 3 of the conference, which ends Wednesday.
Margaret Davidson, NOAA’s senior advisor for coastal inundation and resilience science and services, and Michael Angelina, executive director of the Academy of Risk Management and Insurance, offered their take on climate change data in a conference session titled “Environmental Intelligence: Quantifying the Risks of Climate Change.”
Davidson said recent data that has been collected but has yet to be made official indicates sea levels could rise by roughly 3 meters or 9 feet by 2050-2060, far higher and quicker than current projections. Until now most projections have warned of sea level rise of up to 4 feet by 2100.
These new findings will likely be released in the latest sets of reports on climate change due out in the next few years.
“The latest field data out of West Antarctic is kind of an OMG thing,” she said.
Davidson’s purpose was to talk about how NOAA is sharing information with the insurance community and the public, and to explain how data on climate change is being collected.
She explained that reports like those from the Intergovernmental Panel on Climate Change and the National Climate Assessment, which come out roughly every five years, are going on old data.
By the time the scientists compiling those reports get the data it’s roughly two years old, because it took those gathering the data that long to collect it. It takes authors of the reports a few years to compile them.
“By the time we get out the report, it’s actually synthesizing data from about a decade ago,” she said.
Angelina’s focus was also on the data. He spoke about the ongoing development of the Actuaries Climate Index and the Actuaries Climate Risk Index.
The goals of the projects are to create climate change indices that reflect an actuarial perspective, to create an index that measures changes in climate extremes, use indices to inform the insurance industry and the public, and promote the actuarial profession by contributing statistically to the climate change debate.
So far their findings show the climate is definitely changing – though neither Davidson nor Angelina addressed the cause of this change, which they said was not the purpose of their talk.
Angelina said a new way of looking at weather is required when dealing with climate change, and that just looking at averages isn’t enough to give an accurate picture of climate change and the risk it presents.
The projects he’s involved with have instead looked at weather extremes.
“By looking at extremes I can actually acknowledge that I have a problem,” he said.
He used the notorious Bell Curve grading system to illustrate his point.
The goal of the curve is to achieve a 70 percent average among students. But if a teacher got to that 70 percent figure by having half the students failing poorly and half doing excellently, there’s a problem: half of the students aren’t getting it.
Looking at extreme temperature indices from more than 40 years ago and now, “things are different,” he said.
So too are days of excessive rain, and excessive dry days, wind power and the sea level index.
“They’re all up,” he said.
He added: “We’re in a different climate. The climate has changed.”
“It is not the strongest or the most intelligent who will survive but those who can best manage change.”
― Leon C. Megginson

Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #79 on: May 03, 2016, 03:26:52 PM »
Insurance companies feel activists' heat for underwriting fossil fuels
Climate group says Australian insurers lag behind overseas companies in not divesting from fossil fuels
Quote
Climate activists are targeting the role of insurance companies in the expansion of fossil fuel production, highlighting the impact of extreme weather events on their bottom line.

“We’ve already targeted banks and super funds, so insurance companies are the next frontier,” said Dan Gocher from the financial activist group Market Forces.

On Monday it hijacked the insurer QBE’s branding in Sydney, plastering the slogan “Made possible by QBE” over images of coalmines and natural disasters.
http://www.theguardian.com/australia-news/2016/may/02/insurance-companies-underwriting-fossil-fuels-climate-market-forces
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6roucho

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Re: Insurance Industry Policies and Climate Change
« Reply #80 on: May 05, 2016, 09:50:19 AM »
Extract: "In his annual letter to investors in his conglomerate Berkshire Hathaway, the billionaire investor fought back against a proposed shareholder resolution demanding his insurance subsidiaries measure and disclose the risks that climate change poses to their business and how the company is responding to the threat. Buffett compared fears over climate change to the brouhaha around apocalyptic Y2K predictions.
I've always found comparisons of Y2K catastrophism to climate change prediction to be bizarre.

A catastrophe didn't happen on 1/1/2k because millions of hours of programming time and gazillions of dollars were invested in taking action to correct the problem. That included at Berkshire Hathaway.

There were no Y2K deniers in companies with computer systems: that wouldn't been a ridiculous position to take. Thus any argument that uses Y2K as a reason for not taking action (including financial action) on climate change is also ridiculous.

I think Buffet is saying this because he feels it's advantageous to him to do so.

oren

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Re: Insurance Industry Policies and Climate Change
« Reply #81 on: May 07, 2016, 07:39:21 PM »
Extract: "In his annual letter to investors in his conglomerate Berkshire Hathaway, the billionaire investor fought back against a proposed shareholder resolution demanding his insurance subsidiaries measure and disclose the risks that climate change poses to their business and how the company is responding to the threat. Buffett compared fears over climate change to the brouhaha around apocalyptic Y2K predictions.
I've always found comparisons of Y2K catastrophism to climate change prediction to be bizarre.

A catastrophe didn't happen on 1/1/2k because millions of hours of programming time and gazillions of dollars were invested in taking action to correct the problem. That included at Berkshire Hathaway.

There were no Y2K deniers in companies with computer systems: that wouldn't been a ridiculous position to take. Thus any argument that uses Y2K as a reason for not taking action (including financial action) on climate change is also ridiculous.

I think Buffet is saying this because he feels it's advantageous to him to do so.

Yeah the Y2K comparison is really evil.

Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #82 on: May 14, 2016, 09:35:26 PM »
Disaster-proof your homes say insurers, climate change is here
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As Fort McMurray continues to smoulder in the wake of raging wildfires, an Insurance Bureau of Canada (IBC) expert is grimly assessing the nation's losses from climate instability.

From the devastating 2013 floods in southern Alberta, which cost the insurance industry $1.8 billion, to the massive fire that destroyed much of Slave Lake, Alta. in 2011, leading to more than $700 million in damages — there's no denying that climate change is a reality from the perspective of insurers.

"It’s happening," said Bill Adams, IBC vice-president for the Western and Pacific Region. "The wake-up call is now. There has been a radical shift in the frequency, severity and nature of insurance claims that we’re seeing as an industry in Canada."

According to IBC, insurance payouts from extreme weather have more than doubled every five to 10 years since the 1980s, and since 2010, claims have hovered between $1 billion and a historic $3 billion, compared with an average of $400 million per year from 1983 to 2008.

Today, insurance companies across the country are gearing up for what promises to be one of the costliest — if not, the most costly — natural disaster in Canadian history in the oil town of Fort McMurray, where a wildfire so powerful it has been nicknamed “the beast,” has ravaged homes since last week.

More than 2,400 structures have been destroyed and another 500 have been damaged.
http://www.nationalobserver.com/2016/05/13/news/disaster-proof-your-homes-say-insurers-climate-change-here
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AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #83 on: July 29, 2016, 06:47:26 PM »
The linked Insurance Journal article is entitled: "Climate Change Modeling is Closer than You Think".

As property insurance renewal occur annually insurance companies, currently pass on climate change risks (beyond the annual risk) to others by either raising premiums and/or canceling high-risk policies during the renewal period.  However, as this longer-term (beyond one-year) climate risk is passed on to both clients and governments (who provide disaster relief); it appears that insurance companies will likely need to provide better climate change model risk projections, due to increasing pressure from the market (who are currently absorbing this new risk):


http://www.insurancejournal.com/news/national/2016/07/28/421596.htm

Extract: "For the last few years you got a common response from catastrophe modelers who advise the property/casualty industry when asked about including the effects of climate change in modeling.
It went something like: “The industry isn’t interested in what the weather will look like in 30, 50 or 100 years, it’s focused on what extreme weather will look like next year.”
But lately it seems that more cat modelers are being asked if they can include the effects of climate change in their models, and at least one modeling firm is now gearing up to offer just that.

No, the P/C industry hasn’t suddenly switched its focus to what’s going to happen 30-plus years from now, said Peter Sousounis, assistant vice president and director of meteorology in AIR’s research and modeling division.
Climate change continues to occur on a relatively slow time scale – slow relative to one-year renewal periods on property – but this doesn’t mean a warming world isn’t having affects in the here-and-now. Though that is still up for debate."
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ghoti

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Re: Insurance Industry Policies and Climate Change
« Reply #84 on: July 29, 2016, 08:17:28 PM »
Costs for overland flooding coverage in Canada have skyrocketed in the last couple of years. Rates even where there is low risk of flooding have climbed to cover for the massive losses that are occurring elsewhere due to huge rainfall events.

Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #85 on: September 17, 2016, 02:07:29 PM »
As fire danger grows, some homeowners are seeing coverage dropped
Quote
California’s five-year drought continues, and with fire danger an ongoing threat to many homeowners, it comes as no surprise that insurance companies are feeling increasingly antsy about the risk of policyholders’ property going up in flames.

But that doesn’t mitigate the kick in the teeth some homeowners are receiving from insurers by losing their coverage.

“Our house has been covered by Hartford for 18 years,” San Dimas resident Lloyd Parry told me. “As of next month, our coverage is being stopped because of what they say is greater wildfire exposure.”

That’s nearly two decades of shelling out roughly $1,800 a year, never once, he said, submitting a claim or missing a payment — all counting for nothing because someone, somewhere within the Connecticut insurance heavyweight decided that Parry’s numbers no longer pencil out.
http://www.latimes.com/business/lazarus/la-fi-lazarus-fire-insurance-20160920-snap-story.html
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AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #86 on: October 07, 2016, 10:50:44 PM »
The insurance industry is planning to use public-private partnerships to turn a profit off of climate disruption:

http://reliefweb.int/report/world/un-world-bank-insurance-sector-tackle-climate-vulnerability

Extract: "A new public-private partnership between the leaders of the United Nations, the World Bank and the insurance sector has adopted a risk management strategy that seeks to harness insurance to promote economic recovery and resilience to climate hazards and disasters.

The Insurance Development Forum (IDF) said that it has decided to contribute to achieving the G7 “InsuResilience” target of providing 400 million of the most vulnerable people in developing countries with increased access to direct or indirect insurance coverage against the impacts of climate change and related natural catastrophes by 2020.

"For many developing countries with scarce resources, rebuilding is often beyond their means. Typically, a disaster is followed by appeals to bilateral, regional, and international partners for aid relief and financial support," said Ms. Helen Clark, IDF Co-Chair and Administrator of the United Nations Development Programme."
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Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #87 on: October 08, 2016, 05:42:30 PM »
The insurance industry is planning to use public-private partnerships to turn a profit off of climate disruption:
...

Regulatory bodies can limit the amount of profit made on insurance coverages, just as they do with, for example, other property/casualty contracts.  This is closely watched -- on U.S. companies, at least.
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solartim27

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Re: Insurance Industry Policies and Climate Change
« Reply #88 on: October 08, 2016, 06:47:44 PM »
FNORD

AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #89 on: December 17, 2016, 04:15:15 PM »
The linked article is entitled: "Climate change threatens ability of insurers to manage risk", and discusses how large the "protection gap" has already grown to, and indicates that the insurance industry's traditional approach to climate risk management are already ineffective:

https://www.theguardian.com/environment/2016/dec/07/climate-change-threatens-ability-insurers-manage-risk

Extract: "The ability of the global insurance industry to manage society’s risks is being threatened by climate change, according to a new report.

The report finds that more frequent extreme weather events are driving up uninsured losses and making some assets uninsurable.

The analysis, by a coalition of the world’s biggest insurers, concluded that the “protection gap” – the difference between the costs of natural disasters and the amount insured – has quadrupled to $100bn (£79bn) a year since the 1980s."

The ClimateWise report, published on Wednesday, also says the industry must also use its risk management expertise to convince policymakers in both the public and private sector of the urgent need for climate action.

The industry’s traditional response to rising insurance risks – raising premiums or withdrawing cover – would not help deal with the rising risks of global warming, it said.


“The insurance industry’s role as society’s risk manager is under threat,” said Maurice Tulloch, chairman of global general insurance at Aviva and chair of ClimateWise. “Our sector will struggle to reduce this protection gap if our response is limited to avoiding, rather than managing, society’s exposure to climate risk.”

See also the following linked article entitled: "Climate protection gap widening, warns insurance report":

http://www.bbc.com/news/science-environment-38229108
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AbruptSLR

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Re: Insurance Industry Policies and Climate Change
« Reply #90 on: January 05, 2017, 04:19:13 PM »
The linked article indicates that the insurance industry paid-out $50 billion for natural disasters in 2016 (uninsured losses were $125 billion), as compared to $27 billion in 2015.

http://www.reuters.com/article/us-disaster-insurance-idUSKBN14O0XG
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Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #91 on: January 14, 2017, 03:07:07 PM »
Louisiana Flood of 2016 drives surge in insurance policies
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The Louisiana Flood of 2016 is driving homeowners to buy federal flood insurance -- some for the first time -- after a steady, years-long decline in participation in the national program.

The National Flood Insurance Program in 2016 is on pace to top its 2012 high in Louisiana of roughly 483,000 active policies, said Wayne Berggren, an insurance crew leader with FEMA. The program is still waiting for its final tally from December.

A bulk of the increase came from 20,000 new policies in Ascension, East Baton Rouge and Livingston parishes, the epicenter of the August floods. ...
http://www.nola.com/environment/index.ssf/2017/01/louisiana_flood_of_2016_drives.html
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Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #92 on: January 20, 2017, 09:57:08 PM »
California Insurance Commissioner discloses insurers' carbon investments facing climate risk

Insurers divested billions in response to Commissioner’s first in nation request
Quote
SACRAMENTO, Calif. — Today Insurance Commissioner Dave Jones announced the results from his Climate Risk Carbon Initiative, which required insurance companies with $100 million in annual premium doing business in California to disclose investments in fossil fuels and asked all insurance companies doing business in California to divest from investments in thermal coal.

According to the financial data disclosed, insurers surveyed have $521 billion in fossil fuel-related securities, which include investments in coal, oil, gas and utilities that rely on coal, oil and gas, $10.5 billion of which consists of investments in thermal coal enterprises.

Since the announcement of Commissioner Jones' Initiative, insurers have already divested more than $4 billion in thermal coal and other fossil fuel investments, and have committed to disposing of an additional $881 million in thermal coal investments. The data also showed that 303 insurance companies have already analyzed the concentration of carbon risk in their investment portfolio, and another 81 agreed to do so in the next 12 months. Insurer responses revealed that 670 companies divested some or all of their coal holdings, or had no coal holdings to divest, and 325 companies acknowledged that they would refrain from making future investments in thermal coal. ...
https://www.insurance.ca.gov/0400-news/0100-press-releases/2017/release004-17.cfm
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Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #93 on: November 15, 2017, 07:20:09 PM »
Warren Buffett’s Berkshire Hathaway insurance group is set to make a loss in 2017 for the first time in 15 years because of a $3bn hit from natural disasters
https://twitter.com/AssaadRazzouk/status/930336919262781440
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Re: Insurance Industry Policies and Climate Change
« Reply #94 on: November 15, 2017, 09:40:29 PM »
What worries the insurance industry in the longer-term is that some, perhaps many, markets will be lost simply because the risk of offering insurance is or will be too high.
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Re: Insurance Industry Policies and Climate Change
« Reply #95 on: November 19, 2017, 03:26:30 AM »
Growing number of global insurance firms divesting from fossil fuels
Report shows around £15bn of assets worldwide have been shifted away from coal companies in the past two years as concern over climate risk rises
Quote
A growing number of insurance companies increasingly affected by the consequences of climate change are selling holdings in coal companies and refusing to underwrite their operations.

About £15bn has been divested in the past two years, according to a new report that rates the world’s leading insurers’ efforts to distance themselves from the fossil fuel industry that is most responsible for carbon emissions. ...
https://www.theguardian.com/environment/2017/nov/15/growing-number-of-global-insurance-firms-divesting-from-fossil-fuels
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Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #96 on: November 19, 2017, 03:34:34 AM »
Low-cost insurance against climate change damage: a godsend for the poor, or “a clever initiative of developed countries to pushing the developing countries to pay for climate risk for which they are not responsible.”

Global insurance plan aims to defuse potential climate damage 'bombshell'
A scheme unveiled at the UN climate summit aims to help protect 400 million poor people from extreme weather by 2020 - but not everyone is convinced
https://www.theguardian.com/environment/2017/nov/14/global-insurance-plan-aims-to-defuse-potential-climate-damage-bombshell
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Re: Insurance Industry Policies and Climate Change
« Reply #98 on: September 18, 2018, 12:00:49 AM »
Interesting blog post on Air Worldwide website, the catastrophe modelling agency widely used by the insurance and re insurance companies, Air Worldwide reckons that climate change is responsible for up to 40% increase in rainfall intensity generated by hurricanes. Question is it well integrated in catastrophe models used by insurance and re insurance companies, or they don't really care as it is mainly a risk for FEMA (which is in urgent need of updating its flood mapping and risk assessment…) although in other Asian countries prone to violent Typhoon, the insurance industry may still take its share in flooding risk generated by dangerous tropical cyclone, while insurance industry still insure flooding risk for commercial risk in the US… In another subject, lead scientist in tropic climate and hurricane Kerry Emanuel at MIT, advises that catastrophe modelling and mapping assessing hurricanes damage should no longer be based on past experience and actuarial calculations but in physics including the science of climate change, his warning probably means that a share of the insurance industry is still backtracking in its assessment of risk…

http://www.air-worldwide.com/Blog/Why-Climate-Change-and-Hurricane-Stalls-Mean-Flooding-Rain/



Sigmetnow

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Re: Insurance Industry Policies and Climate Change
« Reply #99 on: December 04, 2018, 09:54:51 PM »
Insurance company goes under after California's Camp Fire
Quote
California's Camp Fire didn't just kill dozens of people and destroy thousands of homes. It also left an insurance company in financial ruins, unable to pay millions of dollars to policyholders.

A state judge ruled that Merced Property & Casualty Co. can't meet its obligations after last month's Camp Fire, the deadliest and most destructive wildfire in California history.

Merced's assets are about $23 million, but it faced about $64 million in outstanding liabilities just in the city of Paradise, court filings show. ...
https://www.cnn.com/2018/12/04/us/camp-fire-insurance-company-liquidation/index.html
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