The factors driving the drought conditions that cause crops—and insurer profits—to wither are the subject of heated debate these days. For years, the P&C industry and scientific community have discussed the possibility of global warming as a major culprit behind severe weather events, and by extension, significant catastrophe losses. Well, new findings from government scientists and a Nobel laureate known for his environmental advocacy are strengthening that connection.

In a July, 2012 report issued by the National Oceanic and Atmospheric Administration (NOAA), scientists concluded that "recent extreme weather events are likely connected to man-made climate change." Based on 50 years of weather data, the analysis specifically linked last year's southwestern drought to temperature fluctuations.

"The drought in Texas in 2011 was made roughly 20 times more likely because of manmade climate change, specifically warming that comes from greenhouse gasses like carbon dioxide," the NOAA explained.