It looks like you're using an Ad Blocker.
Please white-list or disable AboveTopSecret.com in your ad-blocking tool.
Some features of ATS will be disabled while you continue to use an ad-blocker.
Insurers May Cash In on Climate Change
Climate change isn't just a crisis. It's a business opportunity--at least in the view of insurance industry leaders, who are mapping out a strategy that could force the rest of the economy to grapple with global warming as never before.
American International Group, the world's largest insurer, announced two weeks ago that it was "actively seeking to incorporate environmental and climate change considerations across its businesses." It is developing new products to respond to the global drive to reduce carbon dioxide emissions. Last month, the No. 1 insurance broker, Marsh & McLennan, distributed a white paper to a roster of Fortune 500 clients, suggesting that corporations ranging from soft-drink companies to banks may need to respond to global warming or be left out in the cold.
These are the first such moves by U.S. insurers, but in Europe, giant reinsurers like Swiss Re have long been active in the Kyoto Protocol, under which 36 nations have been participating in a market-based system to cut carbon dioxide. The phenomenal growth of that fledgling market, coinciding with last year's record claims due to the violent Gulf Coast hurricanes, has focused insurers on the money that could be made--or lost--on climate change. That's a welcome development for environmentalists. "They are a high-leverage, high-impact industry," says Mindy Lubber, president of the shareholder activist group Ceres. Ceres coordinates the Investor Network on Climate Risk, institutional investors who manage $3 trillion in assets and have been pushing for insurers to become advocates on the issue, much as they pushed successfully in the past for fire codes or auto safety regulations.
Many attribute insurers' new climate awareness to the record $55.3 billion in natural disaster losses they sustained in 2005, double the previous high point set just the year before, with Hurricane Katrina leading the pack.
Lloyd's tells members climate change could destroy insurers
Lloyd's of London, the oldest insurance market in the world, yesterday urged its members to start taking global warming more seriously, by increasing prices to avoid being "swept away" in a sea of future financial claims.
Premiums will have to rise and some risks might even be classed as uninsurable due to greenhouse gases and rising sea levels, warned Lloyd's in a report entitled Climate Change, Adapt or Bust.
"Although it's almost two decades since the UN recognised that climate change was a catastrophic threat to the Earth, it's clear that the insurance industry has not taken catastrophe trends seriously enough. Climate change is today's problem not tomorrow's. If we don't take action now to understand the changing nature of our planet we will face extinction," said Lloyd's director, Rolf Tolle.