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What the Insurance Industry Thinks About Climate Change
Hugh Pickens DOT Com writes "Joseph Stromberg reports at the Smithsonian that if there's one group has an obvious and immediate financial stake in climate change, it's the insurance industry and in recent years, insurance industry researchers who attempt to determine the annual odds of catastrophic weather-related disasters say they're seeing something new. 'Our business depends on us being neutral. We simply try to make the best possible assessment of risk today, with no vested interest,' says Robert Muir-Wood, the chief scientist of Risk Management Solutions (RMS), a company that creates software models to allow insurance companies to calculate risk. Most insurers, including the reinsurance companies that bear much of the ultimate risk in the industry, have little time for the arguments heard in some right-wing circles that climate change isn't happening, and are quite comfortable with the scientific consensus that burning fossil fuels is the main culprit of global warming. 'Insurance is heavily dependent on scientific thought,' says Frank Nutter, president of the Reinsurance Association of America. 'It is not as amenable to politicized scientific thought.' A pronounced shift can be seen in extreme rainfall events, heat waves and wind storms and the underlying reason is climate change, says Muir-Wood, driven by rising greenhouse gas emissions. 'The first model in which we changed our perspective is on U.S. Atlantic hurricanes. Basically, after the 2004 and 2005 seasons, we determined that it was unsafe to simply assume that historical averages still applied,' he says. 'We've since seen that today's activity has changed in other particular areas as well—with extreme rainfall events, such as the recent flooding in Boulder, Colorado, and with heat waves in certain parts of the world.' Muir-Wood puts his money where his mouth is. 'I personally wouldn't invest in beachfront property anymore,' he says, noting the steady increase in sea level we're expecting to see worldwide in the coming century, on top of more extreme storms. 'And if you're thinking about it, I'd calculate quite carefully how far back you'd have to be in the event of a hurricane.'"
Insurance companies are always looking for an excuse to raise rates. They are not going to look for evidence against global warming when they can pretend that it has all been totally proven and tell clients that the risks are now sky high and, oh, by the way, your rates are now 60% higher to account for that.
Now all of the Detroit real-estate strategies make sense. The next hurricane that hits New York will cause the insurance companies to back out like they did in the gulf (which put Atlanta over the real estate tipping point). But, first, lets put Detroit into bankrupcy so that the wealthy can extract the land first.
Note this blurb:
But even in the short term, Muir-Woodâ(TM)s team has determined, the risk of a variety of disasters seems to have already shifted. âoeThe first model in which we changed our perspective is on U.S. Atlantic hurricanes. Basically, after the 2004 and 2005 seasons, we determined that it was unsafe to simply assume that historical averages still applied,â he says. âoeWeâ(TM)ve since seen that todayâ(TM)s activity has changed in other particular areas as wellâ"with extreme rainfall events, such as the recent flooding in Boulder, Colorado, and with heat waves in certain parts of the world.â
Sure, we can blame that on climate change, it is the fad after all. But here, the big ignored factor is public flood insurance - something they don't mention at all. If you subsidize the building and repair of stuff in flood-prone areas, then more stuff gets built there and you get more flood damage. It's a straightforward case of moral hazard. And note all the flooding damage they bother to mention is in the US.
winter's coming...
They exist to help it's customers in times of need, yet it's a for profit business. Those 2 do NOT work together.
Be seeing you...
"I wouldn't invest in beach front property"
Tell that to the residents of Boulder, Co.
Also see http://rogerpielkejr.blogspot.com/2010/01/castles-built-on-sand.html
The downside is that their less-pessimistic competitors undercut them on rates and win big.
Until, of course, the pessimistic view proves right, and those competitors go under. Or, if you're really pessimistic, get a bailout.
Seriously, you take their estimate of risk as gospel? Their goal is to collect as much as possible, and pay as little as possible. They are simply trying to hedge their bets on the collection side. Duh.
And for the record, the Atlantic hurricane intensity has not increased one iota. That is a complete outright lie which they should know if they spoke to an actual expert on Atlantic basin hurricanes. The reason for larger payouts from damage in the past is that MORE people and expensive property are near the coast lines. They have been subsidizing bad behavior. Climate change is not the culprit there.
I read through the IPCC report, and here's what I got..
Not only is the anecdotal evidence pretty strong, but now we have scientific evidence: we've burned so much gas in so many combustion engines over the past century we can now measure the effect or "leftover" from that at every corner of the globe. The science tying climate change to anthropomorphic means however, is far from bulletproof and the report itself cannot say it is anything more than "likely".
I think it's obvious humanity now plays a significant role in the carbon cycle. Plant life has been robbing the atmosphere of carbon for millions of years, and for all I know humans are just another counterbalancing act of this earth intended to dig up what plants buried and start it all over again.
In terms of it's effects, I, and most of those around me, could not give a rat's ass. I live in a cold climate - we just had one of the most mild, warm, enjoyable Septembers I can remember in my life. If we're going to chalk up all the weather incidents as anecdotal evidence of climate change, I'm going to start touting the positive aspects. For those folk living on coastlines, too fucking bad. You should have known damn well that rising or lowering sea level was a risk, and you should probably be thankful you haven't had one of those instantaneous sea-rise events (aka a tsunami) wash your ass away already. The nice places to live on this planet are shifting, and the miserable long winters most places on this earth have to endure are disappearing - deal with it. The only people I hear complaining are those with the most in terms of $$$ of real estate value to lose.
I find the predictions of more severe weather events disingenuous. We've always had severe weather events, and making sure those don't kill us all is what we should be planning for. To those shouting doom and catastrophe over small rises in global temperatures, you just sound silly.
If another insurance company thinks climate change is a bunch of bunk, they can lower rates and steal business from the company that has reached the opposite conclusion.
Regardless of the science, this is a reason that can be used to justify rate increases. Note the quote about Atlantic hurricanes doesn't cover the past couple of years of almost no hurricanes.
Insurance companies are hardly disinterested observers here.
Actually what the insurance companies may be doing here is what the water department did in Seattle back in the 1990s when there was a drought. Claiming they had fixed costs but less water to sell, they raised rates. And what happened the next year when there was ample water? Those rates stayed up.
Insurance companies know that about half the people in this company have bought the more-bad-weather claims of alarmists and they figure they can get away with raising rates and then keeping them high when this alarm fades away. Executive salaries will soak up that added income.
What the statistics show is that damage being done has gone up simply because real estate is more valuable. That matters not to insurance companies, since their rates are set by property valuation. That said, there isn't data showing more destructive weather such as hurricanes. As Roger Pielke recently noted on his blog:
"The graph above provides an update to data on the remarkable ongoing US "intense hurricane drought." When the Atlantic hurricane season starts next June 1, it will have been 2,777 days since the last time an intense (that is a Category 3, 4 or 5) hurricane made landfall along the US coast (Wilma in 2005). Such a prolonged period without an intense hurricane landfall has not been observed since 1900."
Hmm, gee, I wonder what the insurance agencies are going to say: "Very little risk, you shouldn't need to worry, definitely don't bother buying insurance." Yeah, right.
Secondly, even if they were impartial, their data is all about the effects (will the sea level rise enough to cause a risk to property) not the cause (is the sea level rising due to CO2 emissions)
Just because you're paranoid doesn't mean there isn't an invisible demon about to eat your face
Insurances are ready to accept global warming as it will help them adjusting their prices, but that does not mean they will do anything to prevent it, nor even to get it accepted by everyone.
People are building in places where they probably shouldn't build. Many of the good places to build are used up, and people have an almost irresistable pull to build in dangerous places.
More people
And yes, there are a lot more catastrophic events happening that are causing a lot more damage
He said that even when the first two events are taken into consideration, there is something quantifiable happening, that makes the industry tend to believe that warming is taking place, and probably man has a hand in it.
I wish I still had the presentation, because it had a lot of facts and figures, without the cherry picking that deniers love to employ. Pretty scary actually.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
"Global warming is going to kill everyone! Oh wait its cooling now? Ok.... CLIMATE CHANGE IS GOING TO KILL EVERYONE! Pay us now!"
And the climate will always change. Sea levels will always rise and fall. They will never stay static under any policy.
Don't conflate insurance company appraisal of relative risk with approval of your doomer malthusian twit worldview.
by form of using more modern definition of intellectual of using his intellect to get money, Gardner approximated that 90%+ of highly gifted kids succeed, by doing old tricks instead of going to real science, it's just easier to sell bs to people whom have money&agenda rather than actually invent something new...
Insurance companies are all about collecting the highest premium and not paying claims. "Global warming" helps justify higher premiums, maybe create fear and uncertainty to buy mire insurance, and perhaps can help palm more claims off to the taxpayer in the occasional big event years.
the past couple of years of almost no hurricanes
Right, in 2012 there were only Sandy and 9 others. Almost none.
I have not heard of anyone who doesn't say it is changing, including the right wing. The reporters statement is disingenuous and trying to make this a political debate rather than a real world debate. The climate is always changing, with or without man. How much impact does man cause is clearly the main point of the debate. We are all meat sacks and we believe we have a greater understanding than we have of our surrounding world. This is a complex issue, environmental, health, international, and economic. Just because one country may blow their budgets on making themselves 'green' it will do no good in the larger scheme. If energy costs sore and nobody can afford to live...we'll have other issues. We don't even understand if the planet is going to do something like create more cloud cover and reflect more light...etc. To quote men in black, "A person is smart. People are dumb, panicky, dangerous animals, and you know it." That is what we're doing. Heck the northwest passage is closing and Antarctica has more ice this year. This is not a political discussion, this is a complex discussion and we need to listen to one another and push towards cleaner energy, but in a reasonable and slow manner in my own opinion. So what is the motivation for the insurance industry? They want more money. :)
What you're describing is the opposite of socialism.
But you're too dishonest to acknowledge this, I'm sure.
OK, in the last couple of years, how many hurricanes have made landfall in Florida and done any serious damage?? Insurance companies have been collecting premiums and haven't paid out much at all since 2005.
If you believe insurance companies have no vested interest in something that can justify their raising rates, I've got some oceanfront property in South Dakota I'd like to sell you.
Take that however you'd like.
Climate change might be happening. But who or what is responsible?
'I personally wouldn't invest in beachfront property anymore,'
That runs counter to the industries best interests. Selling high priced insurance on expensive property. So if I was in the insurance business and I thought that risk could be mitigated by changing behavior, I'd be lobbying for that. On the other hand, if I thought that the change was inevitable and there was nothing to bee done, I'd tell people to avoid the risk.
Have gnu, will travel.
The "downside" is that Hugh Pickens is Roland Piquepaille
reincarnated.
that is to make money, if they follow popular opinion they can raise rates and blame global warming/global cooling/climate change...
Could we get someone to argue in support of global climate change who isn't a Nutter :)
Or it could just be that telling people "...because of climate change," means you can charge more.
It's a perfect time for being wasted.
A perfect time to watch the stars.
- Burden Brothers, "Beautiful Night"
I've read some of the comments, one way and another, and would like to make a couple of observations:
The only thing preventing the insurance companies from raising rates is competition. If they can point to something like GW as justification, they stand to make more money. At worst, they won't loose any. Yes, there are higher costs associated with weather related events, but as has been pointed out in many posts, there are more people building (more expensive) structures in areas subject to those events. Global Warming? Can't say, since I'm not scientifically trained in climatology. But you might want to hedge your bets either way.
Not everyone agrees.
âoeAny society that would give up a little liberty to gain a little security will deserve neither and lose both.
In other words; the insurance companies are embracing pseud-science.
My karma is not a Chameleon.
Oh, you know else who is making business decisions based on a future of anthropogenic (sorry, I typed wrong) climate change?
ADM, Monsanto, Dow Chemical. Companies that are involved in worldwide agribusiness. They're all betting heavily on climate change (the anthro-something one).
But not you, because you know better and the AM radio told you so.
You are welcome on my lawn.
How many were predicted? How many were predicted to his US mainland? How many did hit US mainland?
And Sandy was a Category 1 storm. Ignoring all the hype, the only reason anyone cares about Sandy is because it hit New York instead of Florida or Texas.
If you think I voted for Trump because of this post, you're wrong. I voted for Dr. Jill Stein of the Green Party. Again.
...to overstate risks, collect high premiums, and end up paying out little in claims.
This is true of *any* insurance scheme.
Calling upon the insurance industry to talk about risks of "climate change" (sigh, it *always* changes), is like asking tobacco lawyers if it's okay to smoke - their self interested answer is both obvious and inane.
New Pricing Opportunities = $$$$$
""Our business depends on us being neutral"" One of the biggest rhetorical statements of the year..
Maybe you can explain this to the people who suffered from flooding and there insurance refuses to cover the damage (obviously they have flood insurance or weather related coverage) . Instead people have to wait for Federal Emergency Assessment to determine whether or an area is eligible for "loans" to cover the damage. Or the damage requires the state and federal agencies to intervene and give out money.
And you cannot use a "computer" to determine if, or when, an event is going to take place it should come down to common consensus, flooding has always happened, hurricanes happen, what you guys/gals are trying to do is figure out how to cheat people out of coverage.
In general no. It is in an insurance company's interest to charge a lower premium, so they then sell more insurance. If they overestimate the risk; more people will go to the competitor, and the competitor will have a better deal.
Overstating the risk basically makes sense, if the entire industry has overstated the risk, AND you have a captive market. For example: Automobile liability insurance is mandated by many states, therefore consumers have to buy it, and thus; the whole market may overstate the risk, with no fear that they are leaving money on the table, that could be their profit.
The captive market, basically means premiums can be 10 to 20 times would that would be otherwise.
At first I thought this was a fake news article until I researched the names. it's real.
One man named Nutter. The other who shares its name with a protected stretch of forest in California Muir-Wood where they filmed the empire strikes back that is at risk due to global warming.
Fiction has to make sense. Reality just has to happen.
You're forgetting market pressure. Predict too high - nobody buys the insurance because it is too expensive and your competition is cheaper. If insurance were a monopoly you would be correct, however.
And you seem to have missed the point this gentleman in the article was trying to make. The rainfall in Boulder is a good example, not a bad one. These people mine data for a living. If they're seeing catastrophic weather events trending upwards, that means something. He even said the old traditional averages around 05 have broken down.
That's vitally, fantastically important information.
Weaselmancer
rediculous.
All this proves is insurance companies have finally figured out they have a "scientific consensus" to hang their premium hikes on.
The business of actuarials is to accurately estimate risk. Ask them what the risks of global warming present to increased claims: they are experts on the subject. As to the causes of global warming, there opinions are no more or less informed than anybody else as it doesn't impact their bottom line. Since nobody but straw men are arguing that global warming isn't happening, the "story" here is that insurance companies confirm that global warming is likely to be happening. Also, the world is round. News at 11.
How to get a bunch malcontent neck beards to not say bad things about corporations; find some way to spin profit seeking as evidence of AGW.
The only real reasons to believe in anthropogenic climate change are Fear, Uncertainty, and Doubt.
the processes of financialization and growth through increased consumption. They will back these trends to the hilt until *after* they start seeing damage, and even then they will limit their cautionary guidelines to very specific circumstances (i.e. beachfront property, and now property with high fire risk).
They remain conservative and give not a damn about conservation, much less the plight of poor and normally uninsured human beings who are in the path of environmental destruction. The people who run and invest in private insurers would switch their operations over to profiting from climate distress tomorrow if the scientific predictions weren't so generalized. They are actively looking for ways to make this transition as we speak.
There were 6 predicted, and 10 happened.
Sandy was category 3, though it had weakened to category 1 when it hit the US. It was the 2nd costliest Atlantic hurricane ever.
No matter what happens I will believe whatever the Koch brothers tell me to believe. You can trust them.
Exactly. Put another way, *the entire industry* has an incentive to overstate the risk together.
I've little faith that anyone is bothering to undercut hurricane insurance because they *all* stand to gain if they keep up the charade that hurricanes are more likely now - taking advantage of popular opinion driven by our warmist friends :)
No - insurance companies figured out they can also cash in on global warming... Especially after they got burned by Katrina, which oddly enough was so expensive because of human error. Aka the dike breaking and flooding the lower plains.
Every time there's an anomaly, which is more times than not with weather, insurance companies will try to scam a few more dollars.
Insurance companies are the LAST person I'd value a scientific endorsement from.
Even if you allow that climate is getting worse, there is no way for these insurance agents to be so sure as to what caused it.
Exxon-Mobil CEO Rex Tillerson said last year that AGW is happening. He went on to argue that we should adapt to it rather than preventing it, but a "should" argument doesn't contradict the science.
Hardly, Pure Malthusian population growth describes a linear growth in potential consumption, and even if it's not linear, it's still growing consistently. That's a good market to invest in making more efficient and thus more profitable products for, climate change need not be scheduled or believed in at all
Money talks and bullshit walks.
If Slashdot were chemistry it would look like this:Cadaverine
You are aware how reinsurance works, right?
Al Capone made his fortunes in ... [Drum Roll] ... Canadian Liqueur AND Insurance!
He was convicted of .... [Drum Roll] ... Tax evasion.
Gotta hand it to Al, he knew how to whip up the fear of God in a "teetotaler's" heart during Prohibition.
I was ready to believe the insurance industry regardless of the appeal to authority argument to make us trust it. The article did two things:
1. Stated that the Climate is changing
2. Failed to address or prove how this is man made.
No one disputes that the climate changes. There are even proven periods of dramatic change. How does that automatically mean we point the finger at humans? I heard the Ice Age came about because the dinosaurs were smoking trees.
Since Wilma, there have been no major hurricanes which have made landfall on the US mainland. Zero. Sandy was not a "major hurricane"; it did a lot of damage because of where it hit, but it was still only Category 1 in strength. This is the longest major hurricane drought on record.
Most of those places no longer exist. They blew away back in the 1930s, or had their milkshake sucked out by Homo Hoover.
So your property is cheap to insure, but your futures contract on bottled water breaks the bank. Nice solution.
It doesn't matter what sort of disaster you're talking about, whether it's man-made, natural, or a combination, someone will always come up with a way to wring a profit from the effects of it. I doubt that the effects of the changes that Earth's climate is undergoing will be any different. With that in mind, the latest short story on my blog takes place near the end of this century, after the oceans have risen about 2 meters and became both more acidic and more polluted, neither of which are good environments for the Golden State Barrage, a sea wall next to the Golden Gate Bridge. An actual plan to build a Golden Gate Barrage was proposed but not approved in 2007. If something of that nature is not built, 2 more meters of the Pacific Ocean will move the coastline inland all the way to Sacramento. Check the on-line sea level rise site yourself. Insurance companies know about this as well. But so do real estate companies, and the corporations who profit from mass changes in where people live. If you want one perspective on what might happen, check out the story. It's called 'Bait.
http://klurgsheld.wordpress.com/2013/09/23/short-story-bait/
Is anyone else basking in the irony of all these pro-business AGW denialists suddenly trying to come up with excuses for why the market disagrees with them?
You don't need regulation for anything, market forces keep companies honest and well behaved!! Except now... because insurance companies are somehow able to charge unnecessarily high premiums without being undercut by a competitor, or the government is making them overcharge or something...
The market is right, unless is disagrees with you, and then it's wrong.
I stole this Sig
I once attended a lecture by the late Carl Sagan with the provocative title "Is There Intelligent Life on Earth?" Actually, he spoke about how one could detect intelligent life on a planet from space, and he said that the easiest way to do so would be to see if lights were clustered around ocean shores.
So much for intelligent life on Earth.
Having contracted to develop risk assessing simulation software with several major vendors in the insurance industry, I can verify that you are completely wrong. They all have different methodologies and "leadership", and they all assess risk in different ways. While there are professional organizations to provide guidelines, the fact that I have personally helped to reimplement the same software with highly variant parameters for risk tells me that there is a lot of personal belief that goes in on top of the guidelines and established facts.
There are companies that attempt the "gouge the customer" method; they tend to quickly go out of business in almost every case as the competition will ruthlessly point out discrepancies in premiums and coverage to win business. My software helps them do that, so by extension my software has helped to keep your premiums low. You are quite welcome.
spelling tip of the day- means created by man. the anthro- part is obvious, and for the second part just think of "progeny" as in your kids (pro genetics). the rest sorts itself out.
Insurance man need fear!
Fear sells insurance.
No fear ... no sale.
Big fear ... everybody bays.
Simple arithmetic. Don't need calculus and don't need algebra.
Tee hee hee! Dat's Obama arithmetic.
Due to the recent historical "evidence" of climate change, we had to re-evaluate interest rates of our customers. We will now be increasing your rate by 16% because you live in an area that is predicted to have increased weather damages. We will also increase your vehicle's insurance by 25% because we feel that your decision for living where you live is a poor decision and poor decisions lead to bad driving. We will also increase your medical coverage by 65% because in 2014, Obamacare will screw us over so we'll pass it on to you.
Please kindly write us a mandatory check because we passed laws through the state allowing us to force you to pay for insurance of all kind. If you don't like it, go live in Mexico you fucking pussy.
Kind Regards,
George Zimmer, CEO of Marksman Warehouse Insurance Group.
There were 6 predicted, and 10 happened.
Good to know. I mis-remembered it the other way.
Sandy was category 3, though it had weakened to category 1 when it hit the US. It was the 2nd costliest Atlantic hurricane ever.
Costly because of where it hit and the long build to storm surge caused a lot of flooding and damage. If it had hit Florida and died over Georgia, no one outside would have cared much*, because it just was not a powerful storm.
.
*I say this because no one cares much whenever Florida gets hit by a hurricane. It's expected to happen.
If you think I voted for Trump because of this post, you're wrong. I voted for Dr. Jill Stein of the Green Party. Again.
The insurance companies are only following the herd. And the new IPCC report is coming out today - Friday - in which, the IPCC has been forced to admit what we knew was true all along: the amount of warming is below all of their projections. In fact, it's been so low, it's well within natural variation. There is no there, there. This is it, the end of the hoax. Look at what the Telegraph said yesterday:
"At the heart of the problem lie the computer models which, for 25 years, have formed the basis for the IPCC’s scaremongering: they predicted runaway global warming, when the real rise in temperatures has been much more modest. So modest, indeed, that it has fallen outside the lowest parameters of the IPCC’s prediction range. The computer models, in short, are bunk."
[..]
"Today, thanks to the internet, sceptical inquirers such as Donna Laframboise (who revealed that some 40 per cent of the IPCC’s papers came not from peer-reviewed journals but from Greenpeace and WWF propaganda) will be going through every chapter with a fine toothcomb. Al Gore’s 'consensus' is about to be holed below the water-line – and those still aboard the SS Global Warming are adjusting their positions. Some, such as scientist Judith Curry of Georgia Tech, have abandoned ship. She describes the IPCC’s stance as 'incomprehensible'."
DONE. QED. The fearmongering can end. Now, if we can only get rid of those ugly windmills.
Stupid Americans can't face up to the tyranny of their government so they create other things to fret over instead. But they can't even get that right so they rename it this "climate change" as though climate change somehow shouldn't happen.
Climate change occurs of many decades to centuries so unless he is insurance 50 years into the future then he ought to be concerned about weather, not climate.
Only when assuming a free and functioning economy with no collusion between insurance companies.
karma police: arrest this man, he talks in maths; he buzzes like a fridge, he's like a detuned radio. [radiohead]
Every once in a while, I find myself in a position to debunk the merits of astrology. As you can imagine, the people who are believers are next to impossible to be persuaded otherwise. However, one of the arguments seem to be more convincing and at least make some of these people think. If the position of stars at the moment of one's birth really influence one's destiny and (say) one's life expectancy, wouldn't insurance companies pay a top dollar for astrological natal charts? Insurance companies do not give two bits for the moral and ideological implications of the formulae they are using to determine their rates. They will use satanic rituals providing they improve their bottom line.
I want to see all the global warmists go to Manhattan and start hollering at people to run inland as fast as they can because the ocean is going to drown them. THEN I will believe in your religion of AGW. Why is no one leaving Manhattan? Is it because they don't believe you??? Until such time I'll worry about bigger threats like buckeyballs.
Despite the dubious nature of polygraph tests and voice stress analysis, insurance companies can use them as a basis of denying claims. Face it. Most capitalists use any pretense to charge as much money as possible to provide as little as possible in return. If insurance companies could get away with using phrenology as a method of raising rates on certain ethnic groups, they would.
insurance rapist - Warren Buffett has violated millions of homeowners while taking their money
First time in awhile that I've seen insurance companies getting (public, open) love from the left ...
Couldn't be any other explanations, of course, like heavily regulated industries trying to ingratiate themselves with government. Nah.
I'm probably all wet though. You remember how well the banking industry predicted mortgage risks, by going with conventional wisdom about less qualified applicants.
In a competitive market, no. For instance, car insurance (at least here) is brutally competitive. If the requirement for mandatory insurance was dropped tomorrow, I doubt premiums would go down. No one insurer can charge 'rip off prices' because someone would undercut them a minute later.
As a counter example, until recently light aircraft in Europe did not have to carry insurance. About 4 years ago, liability insurance became compulsory (with fairly high lower limits, too - in £millions). Our insurance premiums didn't go up when mandatory insurance came in, even though aviation insurance is a lot less competitive than car insurance.
Oolite: Elite-like game. For Mac, Linux and Windows
Insurance companies live or die by correctly assessing the risk they cover, and translating the expected cost + safety margin + operating cost + profit margin into insurance premiums.
And yes, they will try to squeeze costs (as indeed anyone who ever tried to claim on their medical insurance will know all too well).
But this is something completely different. Insurance companies are giving notice that they will not offer cover anymore for certain risks (i.e. against premiums that are considered marketable).
They are leaving this piece of business on the table, which definitely causes them a loss in turnover. And that (counter to your superficial assumptions) is not a negotiating ploy. They just don't want it.
That in turn should set you thinking.
(1) that more widespread and severe weather extremes aren't related to an global change in weather patterns (i.e. climate change), and
(2) and that this global change is related to human activity
Well, that's an improvement on earlier positions taken in this debate in that you implicitly acknowledge that there are measurable and impactful weather changes. That used to be denied too (and still is by people who don't follow the news and by people who's thinking is faith-based rather than fact-based).
As to whether climate change is happening, the successive IPCC reports are remarkably consistent. It is.
As to the linkage between human activity and climate change, it's just the paragraphs aimed at the public and policy makers have been rephrased. Not the underlying observations and thought.
New Scientist has a readable and accessible discourse on how people deal with the message.
http://www.newscientist.com/article/mg21929360.200-climate-science-why-the-world-wont-listen.html
Until, of course, the pessimistic view proves right, and those competitors go under.
Ghi, I see what you did there :)
Fear is the justification that these insurance companies are going to use to jack people's rates up. We have seen fewer hurricanes, fewer tornadoes and sea level rise is still about the same as it has been for the last 100 years, and yet people are more than willing to pay more for insurance simply because these disasters "must be in the pipeline."
Here is the secret:
People will always take advantage of you if you let them for monetary gain. And people will always side politically with the group that benefits them the most. Who benefits from climate change hysteria?
Or perhaps the insurance companies are doing both...being prudent just in case temperatures do start rising from our stagnant levels over the last 15 years, and if it turns out to be wrong, those rate increases can be blamed on the scientists. Its really win-win for them, and I would be careful if I was predicting doom and gloom, because if people get screwed out of money that goes into insurance companies, those people might be a little pissed in the end. So keep your predictions and projections on a realistic level is the moral there. People do tend to get over-excited about being made to be chumps with money.
The insurance companies have a vested interest in lowering their risk and taking in more money. ANY crisis (real or imagined) is a great way to slurp in some $$$.
I would hope people would bet heavily on climate change. Because the climate on this planet has been changing drastically for the last 4 billion years and I doubt it will suddenly decide to STOP changing because humans now inhabit this planet. We have seen vast hot times, vast ice ages and even a probable snow-ball Earth where the entire planet was covered in ice. We have even seen atmospheres that would poison humans, and atmospheres without oxygen even.
This planet has been changing since day 1. So yes, you are throwing out a red herring here either through ignorance on what climate skeptics believe, or because you just want to insult half the US through your "talking points." Serious climate skeptics do not believe the warming we have seen is the fault of man, but rather natural warming that the planet is giving us through processes that we do not quite understand yet. Most of us also believe as a rule that CO2 DOES have an effect, but that its been over-emphasized by political organizations that take the normal 1C per doubling of CO2 and simply multiply it by some figure to make it worse with zero proof that water will amplify the effect instead of moderating the effect of CO2 increases which is what water normally behaves. (Hello, we use water as a temperature moderator in nuclear power plants, so we do know it behaves like this)...
In any event, the last 15 years are showing that the climate models which were never more than a weak hypothesis were in fact wrong. If CO2 did drive temperatures, the temperatures would have kept on increasing as long as CO2 was increasing in our atmosphere. That failure of the models in essence shows us that CO2 has a more minor impact on temperatures which kind of leaves the only alternative left:
That the climate is changing due to reasons we do not understand.
The experts are the ones stuck on the dying horse. The rest of us have moved on and are trying to figure out what is causing the current stagnant temperatures. As for future temperatures, Ill flip the coin and tell you what the future holds. And I hope these companies are also planning for a cooling world, because frankly we are in what is called an inter-glacial and at some point regardless of man we will be thrust back into an ice age that will be much worse than the supposed catastrophe of warming. We can adapt to warming. We can not adapt to cooling as well. Think about that.
So.. if I understand you correctly.. Mother Nature is claiming that Global Warming is not her fault, but the insurance companies are using pseudoscience such as a polygraph test to prove in court that she's a lying bitch, and that the judge should agree with their refusal to pay out damages?
I think I need to sleep more..
Really? His surname is Muir-Wood? How cool is that! I wonder how long it took him (or his parents) to find a compatible spouse with the correct last name.
In which case there's been no lack of warming.
If you don't like the central electrical infrastructure, why the hell are you using a car? Do you have your own oilfield and refining process???
Meanwhile, put some solar panels on your roof.
You are aware how reinsurance works, right?
You are aware that the reinsurers really believe that global warming is coming down the pipe and have already started to adjust their rates accordingly?
"Little does he know, but there is no 'I' in 'Idiot'!"
Only when assuming a free and functioning economy with no collusion between insurance companies.
Any DA proving (and busting) such an illegal collusion will gain a lot of fame and glory, and will be destined for great things. The insurers know this.
"Little does he know, but there is no 'I' in 'Idiot'!"
It's all a scam that you'd be so into but "the man" (who is pushing the scam) won't let anyone in, which is why nobody has come forward with the proof of the scame.
But we can infer proof of the scam (despite not being able to infer the existence of continued global warming from the weather events) because you haven't become an insurance broker to make out like a bandit by undercutting these scamming insurers and not buying into the AGW scam.
Can't we.
They only back events with the smallest possible probability of occurence.
They stand to profit from sowing fear.
On those criteria alone, you might simply conclude that the insurance industry has found: the climate is not changing nor is the incidence of extreme weather, and that humans are not the cause of any changes.
Honesty from the insurance industry? Now that's a low probability event.
"Consensus" in science is _always_ a political construct.
Since more and more people belive in global warming, why not charge them extra for this ?
Insurance companies have been relieved at the total miscalculation by forecasters:
http://www.carriermanagement.com/news/2013/09/27/113634.htm
Science is not based on consensus.
You do not get to vote on the truth
Here are some "facts? based on consensus"
The sky is blue; no it is not.
The earth is round; no it is not.
It is hotter than it has ever been; no it is not.
It is colder than it has ever been; no it is not.
The temperature of the Pacific Ocean is hotter than it has ever been in the last 5000 years.
How do you take the temperature of 20million cubic miles of fluid?
The Earth is a dynamic system, heated by a thermonuclear fusion engine literally 1million times bigger than the planet.
A belch of volcano gas is has a greater affects than mankind in upseting the balance of airflow and heat absorbption.
We live in the 3mile skin of an 8000mile ball.
I remind you of the parable of the elephant and the 5 blind men:
One man in the Himalayas notices to ice sheet getting smaller and declares Global Warming.
One man in Antarctica notices the ice sheet getting thicker and declares Global Cooling.
One man on the north side of an island notices the beach disappearing and declares the oceans are rising.
One man on the south end of the island notices the beach is increasing and declares the oceans are receding.
One man notices that it is the hottest summer on "record" and declares Global Warming.
One man notices the same year that his summer is the coldest on record and declares Global Cooling.
All are true
For you to "believe" that you matter, you affect the planet, shows how self-important you are, how little you understand.
We literally are a speck on a rock next to an ocean. In comparable size, we are an anthill on the football(or soccer) field.
Even if we tried, we do not affect the outcome of the game.
No they can't really. The article is really about the reinsurance companies. These are the companies from which the insurance companies buy their insurance. Insurance company X maybe doesn't have $10B in the bank to underwrite all their policies. They may be bringing in $100M per year in policies, and pay $75M per year to underwrite their policies from reinsurance company Y. Note that I'm not in the business and I'm pulling these numbers out of a hat.
An established company is probably running similar risk numbers to everyone else and reaching similar conclusions. An upstart insurance company betting against global warming and offering lower policies is unlikely to have the cashflow to purchase their more expensive reinsurance. They're also the ones most likely to need reinsurance as they don't possess any significant assets to underwrite their policies themselves.
www.clarke.ca
Yes, the climate is changing, and the insurance industry is adjusting accordingly. That simply isn't the issue.
The issue is whether the changes are preventable through intervention, and what the cost/benefit tradeoffs are.
If the main conclusion is "don't buy beachfront property", that doesn't imply much of a need for action. Beachfront property has always been risky anyway, and that includes entire cities that are directly on the water.
Just to be clear, do you think that anthropogenic climate change refers to climate change influenced by humans, or climate change which is occurring naturally.
Is 1563649 a prime number?
Infallible theory you've got there ...
You'll remember how well the banking industry predicted the risks of mortgage default. What could go wrong?
It means that in order to protect its revenue streams selling insurance, rather than losing those revenues to self-insureds, " The insurance industry should play an active role in raising awareness of risk and climate change through risk education and disseminating high-quality risk information".
Again, we are faced with a profit motive to beat the GW drum.
Captcha reads: downplay
LOL
'Our business depends on us being neutral. We simply try to make the best possible assessment of risk today, with no vested interest,'
Hahahahahahahahahahahahahahahahahahahahahahaha!!!!
Wow, I wonder how he said that with a straight face.
The way i see it ...humanity's greatest contribution to the greenhouse effect and global warming is not burning fossil fuels ... it's population growth ... turn 80% of the worlds population into fertilizer and we won't have any significant effect on climate change.
Waste of time. This person is clearly biased and extreme; waste of time trying to educate or correct the misinformation. Not lies but a lot of mistakes and ignorance.
For example, Global Cooling or Global Dimming is completely mischaracterized; Global Dimming science was found to be completely aligned with Global Warming science.
Oddly, the thin atmosphere is actually mentioned while at the same time as the tired argument about how we are too small to impact it. Why not mention how density works and how much gas is produced when a solid is gassified? Or follow up your lose reference to sunlight with those embarrassing arguments about solar activity, distance from sun, mars being cold, etc? Or better yet, rant about how we didn't improve the ozone or acid rain problems and that they in fact never existed but were created so that decades later they could be used as part of the scientific community's conspiracy to make us Pagan.
Democracy Now! - uncensored, anti-establishment news
Serious climate skeptics do not believe the warming we have seen is the fault of man, but rather natural warming that the planet is giving us through processes that we do not quite understand yet. Most of us also believe as a rule that CO2 DOES have an effect, but that its been over-emphasized by political organizations that take the normal 1C per doubling of CO2 and simply multiply it by some figure to make it worse with zero proof that water will amplify the effect instead of moderating the effect of CO2 increases which is what water normally behaves. (Hello, we use water as a temperature moderator in nuclear power plants, so we do know it behaves like this)...
To quote Pauli, "This isn't right. This isn't even wrong."
The reason the ocean is a moderating influence isn't because of it's thermal capacity (as it is in reactors), it's because of CO2's solubility - as the concentration of CO2 in the atmosphere increases, the amount dissolved into the oceans at the ocean/atmosphere surface boundary increases accordingly, to a certain limit. This is part of the reason for ocean acidification. So hello to you, sir. It's not behaving the way it does for the reasons you seem to think it does, so perhaps you should revisit your conclusions.
As to the 'over politicization' of CO2's effect, I hardly see the specific heat capacity of 37.135 J/K mol being something amenable to political interpretation. It is measured, it exists. Painting it all as some Grand Mystery is nonsense. We know it's a greenhouse gas, we know a product of hydrocarbon combustion is CO2, we've measured the increase in ppm of CO2 in the atmosphere. As far as I'm concerned, it'd be the height of irrationality (and irresponsibility), to not expect an increase in temperature, and plan accordingly.
Now, if you want to debate that at time X climate effect Y will happen with Z certainty is nonsense? Go mad. But the primary principles behind the heating of the earth's atmosphere are solid. There's no mystery there.
That the climate is changing due to reasons we do not understand.
If the current regime of study is failing us, how would you propose to understand it, then?
covering your home against all losses where it is covered by sea water to a depth exceeding 50 feet.
Please send $2,000 to the First Bank of Lagos, Nigeria acct # 23249865 for the first year's coverage and the policy will be returned forthwith.
Um, is this a trick question? Caused by humans, of course.
"with its genesis in humanity"
You are welcome on my lawn.
No doubt. And it is in the best interests of the insurance companies to promote beliefs that exaggerate risk to allow the charging of higher premiums, and the payout of fewer claims.
Sounds like a wildly optimistic statement :) There's no particular reason to believe that you haven't encoded beliefs into your software that exaggerate risk, either by relying on dubious information (say, as in climate models that have no regional resolution, and even fail on the global metrics), or by discounting mitigations to risk.
Your software may have been used, but I doubt you can show that in its absence, premiums would be higher :)
I think what you mean to say is, "Experts are always wrong."
Because when you can sufficiently devalue expertise, you can tell people anything. It's why there's a huge battle between religion and science right now.
Because experts pee into the swimming pool of superstition.
You are welcome on my lawn.
From the UN report they admit temperatures haven't risen for 15 years and they admit they don't know why. This breaks their models that depend on CO2 as the cause.
Ok Slashdot guys, you act as if you're scientists. What did they teach you in grade school about the scientific method? A hypothesis is valid until there is a counter example. With the CO2 levels now over 400 PPM, we have our counter example. This is not hard guys. In fact it's obvious.
Something caused temperatures to rise. Clearly it wasn't CO2.
As for the weather, that's funny. In 1893 Hogg island was mostly wiped off the face of the earth - http://en.wikipedia.org/wiki/Hog_Island_(New_York) . Of course today that would somehow be "proof". Other storms, I remember real bad storms going back decades. Mud slides in California, etc. In short - mother nature being mother nature. I don't see a change and as for the hurricanes this season has been way below what they had predicted - again due to bad models.
Time all scientists admit the obvious. CO2 is a symptom and not the cause. Greenhouses are not hot due to CO2 by the way. It isn't as if they pump CO2 into the house.
... And modded down for mentioning another BS mod!!
Insurance companies are in the business of making money by accepting risks in return for premiums. If they don't charge enough for premiums, or the risks are higher than they expect, they'll lose money (sometimes catastrophically, if they've covered too many correlated events.) But if they charge too much for premiums, customers aren't going to buy from them, and customers like banks and big corporations have more choices about who to buy from (including self-insurance) than you do.
So they have to either charge rates that are vaguely realistic, or they're not going to make money, especially if they have competitors who have roughly the same information about risks that they do and will undercut them if they get too greedy.
And as one of the spokescritters said, they have to base their rates on actual science; basing them on politicized "science" doesn't work. Coal companies are in the opposite position - if real science says they're destroying the world with greenhouse gasses, and politicized science says "Sure, no problem", they've got a big incentive to politicize science so they can sell their coal, instead of having policies based on real science that force them to stop.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
won't be long and no company will insure anybody for anything.