Top Insurance stories in 2007--including climate change

Insurance Journal: ... 2007 marked a turning point on climate change. In February, the Intergovernmental Panel on Climate Change issued the first of three reports. It confirmed: 1) the temperature in the atmosphere and the oceans has grown warmer and can be expected to continue to do so. 2) The amount of greenhouse gasses, mainly CO2 and some methane, has increased markedly since 1750. 3) These gasses are the most significant cause for the temperature increase. 4) Human activity is primarily responsible for their production. Examinations of the likely impact and the remedial steps needed to slow or reverse it followed.

Al Gore also played a major role in this debate, going from politician to Oscar winning filmmaker — for "An Inconvenient Truth" — to Nobel Peace Prize winner (shared with the IPCC). But his political stances have alienated a lot of people, particularly in the United States. The insurance industry, however, has taken a leading role in documenting climate change and in attempting to halt its advance.

Munich Re and Swiss Re have entire departments dedicated to assessing the impacts. Lloyd's 360 Project recently analyzed the phenomenon. Their actions are driven by the realization that unchecked global warming could eventually wipe out the industry. A report published recently by Risk Management Solutions, the United Kingdom's Tyndall Center, the Organisation for Economic Co-operation and Development, and France's CIRED, analyzed rising sea levels, coupled with extreme weather events. The conclusion: "Total property and infrastructure exposure is predicted to increase from $3 trillion today — 5 percent of current global GDP — to $35 trillion in the 2070s — 9 percent of the projected global GDP." The United Nations Environment Program sponsored a conference in Bali earlier this month aimed at formulating the world's response to the challenge it faces. At the top of the list are carbon emissions. Only time will tell if the measures the U.N. recommends are widely adopted, and whether they will be enough.