A new Insurance company report
reveals that a major insurer of properties is calling for action on Climate Change, highlighting the instability of being able to insure claims in a rapidly destabilizing environment:
While the natural catastrophes of last year did not reach the same magnitude as the record–setting levels of 2017, it was a major year for CATs nonetheless, with insured losses estimated in the range of $80 billion, likely the fourth highest in 50 years. To me, as notable were the sheer number of natural events, which exceeded ’17’s total, the almost biblical range — wind, fire, flood, quake — and the diversity of places from which they originated — the U.S. (hurricanes, floods, wildfires and winter storms), Japan (typhoons and earthquakes) and Hong Kong, China and Australia (typhoons), to name a few. For Chubb, pre–tax net catastrophe losses were significantly lower this year — $1.6 billion compared to $2.7 billion in 2017 — but about $700 million more than we planned for when calculating our “expected” CATs for the year.
Climate change is a reality and its effects can be seen by an increased frequency and severity of natural catastrophes. Climate change is contributing to higher sea surface temperatures, rising sea levels and an increasing trend in extreme weather events, including floods, droughts, winter storms, heat waves, wildfires and hurricane intensity. These weather events are colliding with the realities of urbanization — the growing exposures from the concentration of people and values created by the long–term shift from rural to urban living, including suburban sprawl — and so many located near water and wilderness because that’s where people want to live. Add to that government social policies that insulate people and society from the true costs of their decisions. Hurricanes Florence, Michael and Harvey were significant events causing record flooding in the U.S. Meanwhile, 2018 was the deadliest and most destructive wildfire season on record in California following ’17’s record–setting wildfires. Given the long–term threat and the short–term nature of politics, the failure of policymakers to address climatechange, including these issues and the costs of living in or near high–risk areas, is an existential threat.
This post reminds me of the 2010 decision by major insurers’ decision to stop insuring any new properties on the coast of North Carolina.
…even if the public and governments drag their feet on reacting to a changing coast, others aren’t waiting to adapt.
State Farm, for example, announced this week that it will no longer write or renew insurance policies for structures on barrier islands to reduce its exposure in areas prone to catastrophic events like hurricanes.
Here is the real point of this story – that insurance companies, which are based on the so-called ‘invisible hand of the free market,’ have seen the writing on the wall and are no longer in the business of insuring new homes on the Outer Banks in my home state of NC (since 2010)
and now Insurance companies are seeing the writing on the wall with these numerous climate events.