Insurers must take concerted action to deal with the mounting catastrophe costs associated with climate change, said a research study published today.
Mindy Lubbers, president of the Boston-based Ceres, which commissioned the study, said, "Insurers and regulators have failed to adequately plan for these escalating weather events that scientists predict will intensify in the years ahead due to warming global temperatures."
The report cites numerous studies predicting that rising global temperatures from higher emissions of greenhouse gases will create additional financial burdens for insurers globally and in the U.S.
Scientists and other policymakers continue to debate whether or not current warming trends stem from man-made civilities, or whether they result from traditional cyclical patterns, the report notes.
Dr. Evan Mills, staff scientist at the U.S. Energy Dept. Lawrence Berkeley National Laboratory, Berkeley, Calif., and lead author of the report, said, "We need to keep in mind that the driving factor is temperature, and there is no debate at all about the rise in temperature."
Oregon Insurance Administrator Joel Ario said that in the long term, "the insurance industry has always played a very important role on the preventive side."
So, while debate continues about the cause of climate change, the insurance industry can play an important role in not only mitigating and spreading losses but also engaging in preventive activities, Mr. Ario said.
What, exactly, can the industry do?
"Right now we are still in the data-gathering phase. And once you have better data, then you can make a better case for preventions," Mr. Ario said.
Ms. Lubbers noted that the insurance industry must work not only to mitigate its losses but also to change business practices that may be leading to global warming.
"Insurers can send a very important message if they say we expect boards to look at climate risk before they issue a policy to large emitters of carbon," she said. "And if their rates are based on emissions, the practices of the company may be changed."
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