The biggest buzz at the RIMS conference here in San Diego this weekwas about the threats and opportunities prompted by climate change.Zurich, Aon and other major players touted ambitious environmentalinitiatives. The chairman of Lloyd's, Lord Peter Levene, even tooka side trip to Sacramento to meet with California Gov. ArnoldSchwarzenegger to talk about the impact of global warming. Is thisall a lot of hot air, or a long overdue response to the mostserious threat our planet faces?

“The most important thing is to get people's attention and get themto understand this is something they need to deal with, withoutknee-jerk reactions,” said Lord Levene. “[Global warming] isthere–we know it's a problem. The experts will argue about how biga problem it is and how much damage it's going to cause. You canmake things change and every little bit helps.”

He added that, I know [Gov. Schwarzenegger] is very passionateabout global warming, and global warming and climate change arevery important to us at Lloyds.” So the meeting was a goodopportunity to talk through those issues.

Lord Levene took the opportunity to call the governor'sattention to “ClimateWise principles” in the United Kingdom,providing a framework for insurance companies globally to buildclimate change considerations into their business operations. Theprinciples were developed following consultation between The Princeof Waless Business & the Environment Program, Lloyds, and otherLondon insurance market participants.

But Lloyd's was far from alone here with its emphasis onclimate-related issues. Zurich had a press conference hereyesterday led by Lindene Patton, someone with a new age title–chiefclimate product officer–to talk about the carrier's program to helprisk managers deal with new exposures related to pollutioncontrol.

“These unique liabilities create unique opportunities,” shesaid, citing a number of new coverage options being rolled out byZurich, such as political risk coverage for carbon credits, newD&O covers for climate-related lawsuits, “green wrap” policiesfor green building projects, and various coverages for a wide arrayof alternative energy projects, such as wind and solar power. Thecarrier is also considering whether to offer energy conservationinsurance and carbon capture and sequestration coverage.

Ms. Patton–a lawyer and certified industrial hygienist with adegree in biochemistry and a master's in public health–wasappointed to her new post after 12 years with Zurich, includinghands-on experience with standard environmental liability. She saysone of her biggest roles will be educational–both internal andexternal.

Indeed, her goal is to work with underwriters and marketingofficials at Zurich, as well as agents, brokers and risk managers,to help everyone understand the emerging exposures posed by climatechange, and how risk management and insurance can best respond.

ACE also cited its own recently introduced “green” policy at awide-ranging press briefing here. The coverage pays the extra costsof adding environmental protection features when repairing orreconstructing a damaged building.

Interestingly, the coverage is available as an endorsement on anexisting ACE property program, or can be added as a stand-alone,wrap-around to another carrier's property policy (a nice way to getin the door to take the entire account at some point). The coverincludes certification costs so the rebuilding earns the coveted“green” seal of approval.

Meanwhile, Aon hosted a panel here at RIMS on “sustainability,”which the brokerage defined as “forcing companies in all sectors toshift from a single-minded focus on the financial bottom line, to amore holistic business view that encompasses economic, social andenvironmental factors, while considering changing and multiplyingregulations worldwide.”

Among the hot-button topics was international environmentalcompliance standards on carbon and greenhouse gas emissions. That,more than anything else, will likely propel climate change higherup the risk management agenda, as it won't be much longer beforeregulations start piling up to ease the impact of global warming,making this less the exotic risk it still is today, and more of amandatory part of every insurance and loss control program.

I know there are those who think fears of global warming is abunch of hooey, but I for one don't believe we can afford to waitaround and do nothing, not with the increased frequency andseverity of hurricanes and the devastation caused by changes inrain and temperature patterns worldwide of late.

In any case, any good risk manager or insurer would agree thatit's better to be safe than sorry, right?

What do you folks think?