Filed Under:Risk Management, Weather Risk

Insurance Industry Ground Zero for Economic Impact of Climate Change

Minot, N.D., June 25, 2011 (Andrea Booher/FEMA)
Minot, N.D., June 25, 2011 (Andrea Booher/FEMA)

The insurance industry must play a key role in spurring positive movement on dealing with the environmental issues caused by climate change, says a report from the advocacy group Ceres.

Failure to act would leave carriers at the mercy of increasing catastrophe losses from weather events, causing them to move out of certain geographic markets and strain the budgets of state governments forced to become insurers of last resort.

He continued, “It is not unusual for insurance companies to withdraw from markets after a major hurricane or earthquake. However, the problem is that when you start to see long-term hurricane or hailstorm patterns, companies start looking at rate increases or seeking to withdraw from markets.”

New York, California and Washington are requiring insurers operating in those states to submit responses to the National Association of Insurance Commissioner survey on climate change impacts and mitigation strategies.

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