Insurers can take a leading role in combating global warming, according to a new report issued today by the Ceres investor coalition.
Mindy Lubber, president of Boston-based Ceres, said that climate change not only poses unprecedented risks to the insurance industry, but also creates vast opportunities for new products and services to help consumers and businesses reduce their losses.
"We've seen encouraging progress from big-name insurers and brokers since last year's devastating hurricanes, but many more creative services will be needed as we confront what is perhaps the biggest threat in the industry's history," she said.
The report follows back-to-back hurricane seasons in the U.S. that caused a record $75 billion in insured losses during 2004 and 2005, including $45 billion from Hurricane Katrina alone.
"While no individual weather event can be attributed to global warming, a growing body of new scientific data show that rising temperatures are likely increasing the intensity of hurricanes, floods, drought, wildfires and other extreme weather events in the United States and globally," she said.
Among the insurance industry actions cited by the report were rate credits from Fireman's Fund for building owners who rebuild damaged properties using practices proven to curb energy use.
It also mentioned that Marsh brokerage and American International Group have launched carbon emissions credit guarantees and other new nonrenewable energy related insurance products that are allowing more companies to participate in carbon offset projects and growing carbon emissions trading markets.
At a press conference, insurance regulators stressed that the insurance industry can be in the forefront of strategies to combat global warning since it has such a stake in the issue.
Mike Kreidler, who co-chairs a National Association of Insurance Commissioners Task Force on the subject and is Washington's insurance commissioner, said current threats go beyond hurricanes to wildfires and droughts, even though their connection to global warming cannot yet be definitively established.
"We have to ensure there is a vibrant insurance market and consumers have choices," he said.
Nebraska Insurance Commissioner Tim Wagner said the issues surrounding global warming for the insurance industry are almost "incomprehensible."
The NAIC is currently considering adopting the report that highlights the insurance industry's unique role in helping the country manage emerging risks.
"Just as the industry asserted its leadership to minimize risks from building fires and earthquakes, it is well-positioned today to further society's understanding of global warming and advance forward-thinking solutions to minimize its impacts," the report stated.
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