Climate change is an underwriter's worst nightmare, reinsurers told

The Royal Gazette (Bermuda): Climate change is "an underwriter's worst nightmare" as its unpredictable effects make assessing risk an increasingly difficult task. That is the view of an expert on the subject, Andre Logan, of Ceres, a non-profit organisation which directs the Investor Network on Climate Risk (INCR.), who says climate change related risk will have a broad impact across virtually all insurance lines. ICNR represents some 60 investors with $5 trillion in assets.

Speaking during a session on climate change at the International Reinsurance Summit at the Fairmont Hamilton Princess on Wednesday, Mr. Logan said insurers could also benefit by producing new products to address climate change risk. He said that more organisations were being sued in global warming-related cases, as big greenhouse gas producers were blamed for rising temperatures and rising sea levels. "Climate change is the new asbestos for insurers," Mr. Logan said….

…He also quoted Warren Buffett, as having said in 2006: "We'd be out of our minds if we wrote weather insurance with the notion that global warming would have no impact at all."

Dr. Robert Muir-Wood, chief research officer of catastrophe modeller Risk Management Solutions, discussed the probability of a power station being by a homeowner whose property had been damaged by a hurricane. He said it could take decades to prove linkages between greenhouse gas emissions and the altered occurrence of hurricanes. However he added: "When the sea level rise is the biggest cause of damage and loss of value, that is the area most hard-wired to climate change."

As rising sea level was the aspect of warming that most people can readily understand, then that would be the type of claim most likely to succeed in such a case, Dr. Muir-Wood added….

Condos in Pascagoula, Mississippi, destroyed by the storm surge from Hurricane Katrina. Photo by MKieper, Wikimedia Commons, under the terms of the GNU Free Documentation license, Version 1.2