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Wednesday, June 6, 2012

Climates changed

An unmistakable sign of climate change showed up this week in the strangest place.

My mailbox.  

I received an unsolicited offer from an insurance company that told me how important it was for me to purchase hailstorm insurance.

Gimmick?  Think again:

Insured losses due to thunderstorms and tornadoes in the U.S. in 2011 dollars. Data and image from Property Claims Service, Munich Re.

The world experienced record-shattering weather extremes last year that caused more than $148 billion in economic losses, and $55 billion in insured losses globally - more than $30 billion of that in the U.S., where 14 severe weather events caused losses of more than $1 billion each, far more than in any previous year. 

And it’s going to get vastly worse.

A car pulverized by hail is the least of the insurance industy’s problem.  Businesses in virtually every sector of the economy are vulnerable.  A changed climate has changed the business climate.
Ceres, Oxfam America and Calvert Investments have released a new guide - “Physical Risks from Climate Change” - to prepare businesses and investors for facing and disclosing climate-related risks.

What are businesses and investors up against? As detailed by Ceres President Mindy Lubber:

For the agriculture and food and beverage sectors it means crop failures, loss of productive land and commodity price volatility. Drought will increase in some areas and severe flooding will rise in other places, while changing growing seasons and unpredictable pest and disease distribution will pose additional challenges.

For the insurance industry it means massive exposure to property damage and business losses from storms, wildfires, floods and droughts.

For the electric power and oil and gas sectors it means supply disruptions and disabled infrastructure.

The report also details risks in the apparel, mining and tourism sectors.

The largest uncontrolled chemistry experiment in history – the carbonization of our atmosphere – is creating huge economic risks that companies are under obligation to disclose.

1 comment:

  1. Great column. I'm looking into flood insurance even though I'm pretty far from the river. The tremendous rain storms we've experienced have flooded my basement a couple of times this year -- and it's only gonna get worse.