Why Aren't Insurers More Active on Global Warming?
A report out today from Munich Re Group (an insurer of insurance companies) says that 2008 is the third highest on record in terms of financial losses caused by natural disasters (not to mention 220,000 human lives), and puts much of the blame on global warming.
Bloomberg reports (emphases mine):
Worldwide insured losses related to natural catastrophes increased about 50 percent to an estimated $45 billion last year compared with 2007, the world’s biggest reinsurer said in an e- mailed statement today. Overall losses more than doubled to about $200 billion, the Munich-based company said.
Natural disasters cost more than 220,000 lives even as the total number of such events declined 22 percent to 750, the report showed. China’s earthquake in Sichuan province in May claimed about 70,000 lives and cost $85 billion in overall losses, while Tropical Cyclone Nargis killed about 84,500 in Myanmar. September’s Hurricane Ike in the U.S. was the most expensive natural disaster for insurers, costing $15 billion.
“Climate change has already started and is very probably contributing to increasingly frequent weather extremes and ensuing natural catastrophes,” management board member Torsten Jeworrek said. “2008 has again shown how important it is for us to analyze risks like climate change in all their facets and to manage the business accordingly.”
Munich Re has been quite vocal in arguing that global warming and climate volatility are leading the insurance industry toward a financial cataclysm. According to this article, Munich Re has taken a longer view of future climate scenarios and their financial impacts, which is only prudent. While US insurers were more active on this a couple of years ago, they seem to have fallen off in their efforts, despite a more open attitude from consumers to look at green alternatives and incentives.
As one commentator put it,
“European insurers, and particularly Munich Re and Swiss Re, have always thought longer term,” said Christopher Treanor, chief executive of insurance broker Mercator Risk Services. “The U.S. as a business culture takes a shorter view.”
Where have we heard this before? This short-term thinking is getting to be a fucking epidemic, and look where it’s got us. It has to stop or we’re just going to hell in a handbasket.
Allstate, State Farm, Firemans, Progressive, Hartford - I’m calling you out. Get off your butts and start doing something about this. Why aren’t I seeing commercials from you extolling the virtues of gas-saving cars and taking public transit? Why aren’t you making it very expensive to air-freight products from China? Why don’t you give me a big break if I do a great job insulating my house?
Heck even the health insurers could get in on the act. If I eat more vegetables and less meat, and eat locally grown seasonal produce, I’m doing the earth a favor as well as my body. Reward me for it and help head off financial ruin at the same time.
And yes I realize this means you competitors have to do this collectively, or individually you’ll shoot yourselves in the foot with higher rates. But divided you will fall, and united you might just squeak by. If the current global economic meltdown has shown us anything, we’re all in this together. Acting selfishly gets us nowhere.