Global Warming Talk Isn't Just Hot Air

Often in this space I scold the insurance industry for short-sighted actions or outright misbehavior that undermines an already tarnished reputation. But what is equally unfortunate is that insurers are not adept enough in spreading the news about the good they do for society–such as their efforts to help combat global warming, or at least mitigate the effects of recent climate change trends.

This notion came to me last week while editing our March 10 cover story, “Insurers Brace For Global Warming.” One of the articles talked about the products and services carriers have introduced to help avert catastrophe losses prompted by climate change (click here for that story), while the other sought to delve into the research supporting those who warn of catastrophic changes ahead, and where the industry stands on the subject (click here for that story).

The fact is that whether or not they believe global warming is a long-term, species-threatening risk, insurers are taking steps to deal with the problems posed by climate change, at least in the short-term.

For example, carriers are introducing new “green” policies to promote environmentally sound construction and rebuilding, while also raising social consciousness about climate change, trading carbon offsets, and taking steps to reduce their own carbon footprints.

Swiss Re–the industry leader on this front–has a four-pillar strategy: understand the risk and what needs to be done about it; promote dialogue and understanding of the exposure (both within and outside of the industry); develop insurance policies to deal with the realities of climate change; and lead by example–such as by providing subsidies to employees who limit their carbon emissions.

Do these programs benefit insurers? Of course, if they help mitigate the risk–especially in catastrophe-prone areas. But so what? The point is that carriers are taking positive, proactive measures to make the world a safer place environmentally.

Rarely is such a laudable commitment touted in the general media, however. A rare exception was the March 6 “BusinessWeek” story, headlined: “Insurance Goes Green.” (Click here for that story.)

The article, by Anne Tergesen, details how “the insurance industry is jumping on the eco-bandwagon,” by offering environmentally-friendly policies for people's homes and cars, including discounts for driving hybrids or cutting down on miles driven, as well as for homeowners using energy-saving appliances and sustainable building materials, or for those who power their homes with solar or wind generators.

Insurers need to tout such efforts more aggressively to show that the industry can be a good corporate citizen.

I realize that “good” news is often a hard sell for the scandal-driven press corps, but since global warming is “hot” as a news story these days, the sledding should be easy for insurer media folk making their pitch.

Why stop there? For years, insurers have led the way on driver safety via studies released by the Insurance Institute For Highway Safety. The Institute for Business and Home Safety also strives to limit losses, deaths, injuries and property damage from natural disasters.

The Insurance Committee for Arson Control, along with the Coalition Against Insurance Fraud, are both doing fine work to stop criminals from hiking the cost of coverage for all policyholders with their misdeeds, while helping protect against property loss and personal injury as well.

Similarly, workers' comp carriers have achieved tremendous gains working with corporate risk managers on workplace safety, as the frequency of injuries on the job has gone down dramatically over the years (while, unfortunately, the cost of severity has soared–thanks to skyrocketing expenses for medical care and prescription drugs).

These stories need to be told. The industry must get the message out–via good PR, media outreach programs and wise use of advertising–so that the only time consumers read about the business isn't when insurers cheat someone or deny a legitimate claim–events which remain the exception rather than the rule.

What do you folks think?