[ExI] Climate Change - Follow the money

BillK pharos at gmail.com
Fri Sep 27 08:53:44 UTC 2013

What is the first industry affected by climate change?
The Insurance industry. And they are reacting to protect their bottom line.


When it comes to the calculating the likelihood of catastrophic
weather, one group has an obvious and immediate financial stake in the
game: the insurance industry. And in recent years, the industry
researchers who attempt to determine the annual odds of catastrophic
weather-related disasters—including floods and wind storms—say they’re
seeing something new.

“Our business depends on us being neutral. We simply try to make the
best possible assessment of risk today, with no vested interest,” says
Robert Muir-Wood, the chief scientist of Risk Management Solutions
(RMS), a company that creates software models to allow insurance
companies to calculate risk. “In the past, when making these
assessments, we looked to history. But in fact, we’ve now realized
that that’s no longer a safe assumption—we can see, with certain
phenomena in certain parts of the world, that the activity today is
not simply the average of history.”

This pronounced shift can be seen in extreme rainfall events, heat
waves and wind storms. The underlying reason, he says, is climate
change, driven by rising greenhouse gas emissions. Muir-Wood’s company
is responsible for figuring out just how much more risk the world’s
insurance companies face as a result of climate change when homeowners
buy policies to protect their property.

RMS isn’t alone. In June, the Geneva Association, an insurance
industry research group, released a report (PDF) outlining evidence of
climate change and describing the new challenges insurance companies
will face as it progresses. “In the non-stationary environment caused
by ocean warming, traditional approaches, which are solely based on
analyzing historical data, increasingly fail to estimate today’s
hazard probabilities,” it stated. “A paradigm shift from historic to
predictive risk assessment methods is necessary.”

What they are saying is that the climate has changed. Their historical
graphs don't apply any more, and it is costing them real money.
Now, that's somebody talking who has a stake in the game.


More information about the extropy-chat mailing list