The Insurance Industry Can’t Afford to Have Their Heads in the Sand on Climate Change
I have been saying for a long time now, that the next revolution in this country will be led, not by ponytailed radicals, not by protestors in the streets, and certainly not by politicians; rather it will by led by accountants. Like an army that crawls on its stomach, the corporatocracy that America has become, crawls on its balance sheet. (Of course, here at Triple Pundit, we’d like to see her roll on the three wheels of people, planet, and profit, but right now we mostly have one big wheel and two tiny ones, which still essentially amounts to crawling.) Wise men have known for ages that you really can’t separate the three in the long run, but then, wise men are not the ones running things.
That is beginning to change in the insurance industry. History has shown that insurance companies, whose ranks are filled with legions of sharp-penciled accountants and actuaries, and whose business is based on understanding and managing risk, don’t do too well with their eyes closed or with their heads in the sand. And they only need to look as far as their own checkbooks to see that something very disruptive and damaging is happening. In 2005, in the aftermath of hurricanes Katrina, Rita and Wilma, damages reached $173 billion worldwide. Here in the US, damages from catastrophic losses cost the insurance industry $62 billion that year, up by 50% from the 1990’s. Back in the 50’s that number was only $4 billion. The number of reported natural disasters has been climbing steadily from around 70 in 1975, climbing into the two hundred range in the 80’s, to an average of around 400 over the past decade. The awakening of insurance executives to the fact that, as Dylan once said, "something is happening here”¦" seems to be beginning with the re-insurance firms, those that insure the insurance companies that insure us.
Andrew Castaldi, head of the catastrophe risk unit for the Swiss Re America Corp, told the Senate’s homeland security and governmental affairs committee in 2007 that, "We believe unequivocally that climate change presents an increasing risk to the world economy and social welfare."
Frank Nutter, president of the Reinsurance Association of America, told the select committee on energy independence and global warming in 2007, "The insurance industry’s financial interest is inter-dependent with climate and weather."
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