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Insurance Industry Looking Hard At Climate Change
A recent paper in Science (abstract) examines the insurance industry's reaction to climate change. The industry rakes in trillions of dollars in revenues every year, and a shifting climate would have the potential to drastically cut into the profits left over after settlements have been paid. Hurricane Sandy alone did about $80 billion worth of damage to New York and New Jersey. With incredible amounts of money at stake, the industry is taking climate projections quite seriously. From the article:
"Many insurers are using climate science to better quantify and diversify their exposure, more accurately price and communicate risk, and target adaptation and loss-prevention efforts. They also analyze their extensive databases of historical weather- and climate-related losses, for both large- and small-scale events. But insurance modeling is a distinct discipline. Unlike climate models, insurers’ models extrapolate historical data rather than simulate the climate system, and they require outputs at finer scales and shorter time frames than climate models."
Charge you a lot more.
...to be made for programmers ! Let's go and rake in some of that....
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
...for APL. Ha !!
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
as well as the banking industry are corrupt and need to go away.
God forbid someone actually get some actual benefit from their insurance...
If you want news from today, you have to come back tomorrow.
We've had a bunch of climate related stories on /. lately. My theory is that when IPCC AR5 comes out officially, the jig will be up. The alarmists are having to make hay while they still can.
For the blessed few who haven't been following the climate wars, IPCC AR5 is the United Nations latest report on global warming. It has several important findings including that shown in Figure 1.4 . The global climate has warmed less than all the IPCC's previous projections. They also conclude that the global temperature will warm about an additional degree in the 21st century. Dry places will get slightly drier. Wet places will get slightly wetter. Extreme weather events will not be more extreme or more frequent. Catastrophic anthropogenic global warming has been cancelled.
http://wattsupwiththat.com/2012/12/14/the-real-ipcc-ar5-draft-bombshell-plus-a-poll/
Global warming has already been forecast http://en.wikipedia.org/wiki/Stern_Review to cost much more than slowing it down/preventing it would cost.
I guess those externalities in economic models (and fossil-fuel price and fossil-fuel-based product prices) weren't so external after all.
Who would have guessed that the economy is a wholly owned subsidiary of the environment?
Where are we going and why are we in a handbasket?
Go figure. While all other industries tries hard to deny it because it is bad for business. Insurance companies are busy acknowledge it because it is good for business to do so.
Finally, we are about get some science that is not tied to advancing some political cause, political party, or some religious belief for or against Gaia.
They're taking a handy excuse to raise their premiums - who would have guessed at such a remarkable development!
The CAGW graphs from models have repeatedly failed to predict current temperature trends, and others, like global methane in the atomosphere. Data has been repeatedly unused, misused and misreported in CAGW pal reviewed "literature". CAGW is a scam and pseudoscience. Go listen to Feynman about missed predictions. Get over it.
Try October 1780 for a month to remember.
1) The insurace companies put pressure on governments to take global warming seriously. Just like they pressured for no smoking for bars-restaurants
2) They add a clause that says your insurance is void if "damage was caused by phenomena caused by global warming", just like they added a clause for "mass riots"
I believe the climate model used in the 2007 IPCC report didn't even include the arctic ice albedo feedback. This made the 2007 projections more optimistic than current projections. I'm sure it's better now, but I'm also a firm believer that they are still missing some major climate systems and chemistry in even the most complicated models.
Insurance has been raising for a couple of years as there is an increase of natural disasters that are purely related to the weather.
Regardles of the who and what, but the climate is changing noticable. Normally at these part in this time of year it is freezing but now we are getting temperatures in the range of 15-18 degrees. We also have more floods then in the previous years. It may be warmer, but we also have a lot more rain.
there's no such thing as climate. OR change
This is a joke. I am joking. Joke joke joke.
...using climate change as an excuse to raise rates? A win-win.
If the scaremongers are right, they cover possible extra expenses... which have not - in any sense - shown up. No extra bad weather, hurricanes, et cetera. Just higher payouts from covering more people.
If they're wrong, the insurance companies get more money for free, and they get the environmental folks to help them get the rate increases approved from various government entities.
"We need to raise our rates to allow for extra payouts from climate change."
"Do we get a refund if you don't have to pay out more?"
"No. But don't you feel better knowing that we might?"
This is just cover for a plausible reason to raise rates... move along.
So it's no longer 'man made global warming' then...
www.climatedepot.com
CO2 has no effect on the Earth's temperature, this has been clearly proved time and time again.
The oil industry is saying it isn't happening, and the insurance companies are saying it is.
The legislation that these two vying groups of lobbyists will produce will be a wonderfully schizophrenic bit of doublethink, I'm guessing.
Weaselmancer
rediculous.
One doesn't even need to consider climate change to mitigate the Hurrican Sandys. The sea level rise is incontrovertible, and easy to extrapolate. The minimum insurance companies should be doing is accounting for sea level rise, regardless of whether it is tied to climate change, and regardless of whether that climate change is anthropogenic, and regardless of whether interventions to mitigate said climate change would be more costly or less costly than doing nothing.
It used to be rational fear e.g. you might have a car accident that turns out to be expensive to repair and pay for damages. However here is a fear that is irrational Climate change the climate always changes, day to day , year to year, century to century. And the difficulty will be was the damages caused by climate change or were you in a flood zone anyway. and fearful governments afraid of being sued are complicit in this. A recent example I have is a local council declaring a flood zone in an area that would only flood if sea levels rose 2-3 metres insurance companies without question simply rose all premiums in the area $3000 -$7000 if you wanted flood insurance. It did have an effect as people in this area were generally concerned about climate change now many I spoke to have seen the money maker it really is
Your'e all thinking it, I just said it for you
"Climate change" has much better impact on the lesser informed. With "global warming" people kept saying "oh look it's snowing in June, global warming my ass!" Of course that snow in June is really caused by global warming but try to explain that to someone who gets their facts from teevee and movies...
In the end, neiher term fully identifies the real problem: man's impact on the environment, which goes much further than rising temperatures: pollution, disappearing sources of food and water, etc.
If you really want to get the point across, use "environmental impact."
This is how you do science: you repeat the method to test the hypothesis. The article hints at what these adjustments entail:
This is similar to Hansen's 1987 (iirc) papers, which were based on a random prediction of a volcanic eruption in a particular year but it turned out to guess the year wrong. Predicting such events, which have a short term effect on the climate, is a guessing game. The numbers were pretty close, but if you repeat the method and replace the projections of CO2 emissions and aerosol emissions from volcanic and other sources, then they end up spot on.
These days, with more computing power available to run more detailed models more times, they do many model runs with a the random natural factors, and end up with a spectrum of results. This allows confidence intervals to be achieved. Hansen, in 1987, didn't have the resources for that; just like Sverre Arrhenius certainly couldn't do that when he estimated a 2C climate sensitivity from his manual model runs in ~1897.
The main problem is not climate change, but rather poor judgement of what to build where. A beachhouse used to be within minutes of the beach, now it is directly on the beach and the building is a lot more expensive. This means the risk of damage is not only greater than it used to be, it is also more expensive when it happens.
Another problem is draining. Swampland is drained and houses are built there. However nature intended such places to be swamps and they tend to reappear when exposed to heavy rain.
Land is claimed from rivers, making them narrower, which prevents heavy flow. When rain makes heavy flow needed, waterlevel raises instead and causes floods, often just before the block, which means the owners of the flooded houses wasn't the one to make the mistake. This was the main problem with the flooding in Germany and Czech Republic in the 90's as well as the major Mississippi flooding.
There is a pretty good example of this on the street where I live. Houses were built on all free plots in the 1950s, except one. This one vacant plot didn't have any house on it until the late 1980s. Turns out that whenever it rains heavily, a lake fills up, sends all the water over the top of the hill, down to the road and then it travels on roads all the way to the ocean. The problem is that whenever the water goes downhill it goes through this new house and no amount of dams and ditches appears to work. It has been flooded twice in the last 10 years alone and none of the other houses have ever been flooded. One has to wonder why this plot was left unused in the first place.
Another fine example is a train repair shop built recently in a moist plot with a stream nearby. The politicians forced the engineers to make the building lower than the engineers recommended because otherwise the roof would be too tall compared to the trees and that wouldn't look nice. Now it has to use a pump to keep dry and they will have water on the floor if the pump stops and they fail to restart it within a certain amount of hours. I bet it completely fails the flood resistance demands set by the same politicians.
Such poorly protected (and often expensive) buildings is a major concern for insurance companies. It's a far greater issue than climate change. However it might be a whole lot easier to get everybody to pay more if it's stated that it's due to climate change than if it goes to "poorly located houses".
Another interesting note about this is one "proof" of climate change is the increasing amount of money paid by insurance companies. Those numbers can't be used to proof worse weather because you can't isolate the costs for climate change and the costs caused for the reasons I mentioned here.
You know, that whole solvency thing is pretty important. I think you're thinking of the gun industry.
Also, Sandy's storm surge, plus the Spring Tide, and the 1 foot of mean SLR since 1900, added up to that 2-3 metres. And also bear in mind: ice sheets are all melting far faster than expected; and also because of ocean currents and other effects, that "mean Sea Level Rise" can very dramatically depending on where you are. In a capitalist society, high flood insurance premiums are the appropriate signal to discourage people to either a) not build in low–lying areas or b) finally give a damn about Global Warming.
Heh, our /. userids differ by 11111 :-)
It was probably a valid critique of the contemporary model predictions of the time. Hansen was really the first to do a good job, first in 1981 and later in 1988 (links are to reviews of those predictions, with empirical observations conveniently overlaid).
... is to deny insurance to people with pre-existing climate issues. :)
Don't just stand there, get that other dog!
The insurance industry is a necessary evil just like government. The only way they stay in business is to make a profit. If you are paying too much either change providers or stop being such a high risk.
Until Obamacare came along insurance was not mandatory.
Clogged Toilets are due to Global Warming !
Would you like that Fear with a bottle of DrainO - And DrainO Reduces Carbon Foot Print !
XD
....had nothing to do with "climate change" or "global warming" or whatever the AGW supporters are calling it this week. Even the climatologists said as much:
http://newswatch.nationalgeographic.com/2012/12/07/csu-researchers-say-sandy-wasnt-influenced-by-global-warming/
Ferret
Sic gorgiamus allos subjectatos nunc
pielkeclimatesci.wordpress.com/2010/08/13/is-jim-hansens-global-temperature-skillful-guest-weblog-by-john-christy/
Putting businesses 8' (and LESS) above sea level in a 100 year storm zone, means you are going to get clobbered on average every 100 years (and have good odds of getting hit in a 3 generation period).
Insurance companies have got to assume any low lying areas next to the ocean will be flooded.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
These turkeys have persistently missed predictions over the last 20 years.
No, not just the Cargo Cult speech, which actually fits many CAGW claimants to a T, but this speech: http://management.curiouscatblog.net/2012/05/17/richard-feynman-explains-the-pdsa-cycle/
Richard Feynman: “If it disagrees with experiment it is wrong, in that simple statement is the key to science, it doesn’t make any difference how beautiful your guess is, it doesn’t make a difference how smart you are (who made the guess), or what his name is, if it disagrees with experiment it is wrong.”
If something is testable and flunks, it is wrong. If something is not testable, it's pseudoscience. Take your pick, my view is that these CAGW turkeys take double helpings with both.
Oh look, I found an interesting discussion about that very post from John Christy of UAH, posted on notorious denier Roger Pielke Jr's blog. The great thing about blogs as compared to scientific journals is that you get to choose your "pal review"! Who will notice if you mis–represent the original data, and use a flawed dataset?
One comment really nails it, and I can't link to it individually, so I'll just include it here:
Here's the whole problem. Even if we reduced CO2 emissions to ZERO, it could still take hundreds of years for the oceans to uptake the excess CO2 and transfer it to the bottom. So, right now, mitigation and risk management are the strategy.
This is my sig.
Have been taking climate change data and model predictions into account for years. Quite accurately, and quite successfully.
This alone should have convinced the non educated cynic..but it involves math, and math is hard so we will just deny anyways.
The Kruger Dunning explains most post on
"The jig is up" was used in their headline on this "leak". Thankfully the Guardian has republished Dana Nuccitelli's excellent piece on the matter.
The politicians, scientists, and businessmen are all making a killing by running around like chicken little. It only makes sense that they'd want in on the action. You've got to figure that any excuse to raise your rates is just fine with those guys.
I have to agree with KeenMustard, whoever modded the parent "troll" should never ever get mod points.
Free Martian Whores!
So we can limit the liability on insurance companies when you try to sue them to get the insurance money they said they would pay in the event of a disaster. We need to realign the legal system and remove regulatory burdens to allow free market solutions to flourish. Then they will be incentive to monitize maximal corporate governance personnels' performance revenues.
BTW, if you didn't catch it, that was sarcasm.
putting the 'B' in LGBTQ+
Say you're fighting a fire.
One of the best mitigation measures is to stop pouring gasoline on it.
Where are we going and why are we in a handbasket?
If climate uncertainty drives up premiums faster than claims, insurance shares are a BUY!
--
It used to be that smoking was the leading single cause of statistics. But now the climate is gaining.
So money starts to realize it is taking a hit from climate change, good. This may in fact trigger a real care for climate change. This how sad this is: untill money is involved... For funding, research and peer finding please refer to the non-profit Aging Portfolio.