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Insurance Industry Looking Hard At Climate Change 156

Posted by Soulskill
from the letting-the-market-decide dept.
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."
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Insurance Industry Looking Hard At Climate Change

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  • by Anonymous Coward on Tuesday December 25, 2012 @04:36PM (#42390165)

    Yeah -- I noticed like you that /. is no longer "News for Nerds, Stuff that matters"... That has been removed from the site.
    I used to come here for cool tech / nerd stuff, now it's overblown with fucking politics which is what all of these stupid ass global warming posts have been...

    I hope you are right about IPCC AR5 -- that would be fucking awesome...

    The icing on the cake was the story talking about strong hurricanes from the 1980's til now... when Sandy came through...
    I guess everything before 1980 that was way more disastrous doesn't count... keep making the data conform to what you want to see...
     

  • by the eric conspiracy (20178) on Tuesday December 25, 2012 @05:10PM (#42390371)

    Nonense. The comparisons that have been done with the original IPCC report vs current data are showing their predictions were suprisingly accurate.

    http://www.livescience.com/25367-first-ipcc-climate-report-accurate.html [livescience.com]

  • by Anonymous Coward on Tuesday December 25, 2012 @05:28PM (#42390469)

    Oh yeah, the smoking gun. This "leaked" graph is definitly proof that all the alarmists are wrong.

    http://www.fool-me-once.com/2010/09/temperatures-are-below-projections.html

    Deniers have only one goal, lie to fool dumb people into thinking there are serious doubts.

    But their whole case is built on hot air, they say the alarmists made the whole thing up while they themselves have nothing but nonsense. There are a few skeptics, but they never claim what the deniers claim they say.

  • by sam_vilain (33533) <sam&vilain,net> on Tuesday December 25, 2012 @09:15PM (#42391609) Homepage

    This is how you do science: you repeat the method to test the hypothesis. The article hints at what these adjustments entail:

    "These included the volcanic eruption of Mt. Pinatubo in 1991, which spewed sunlight-blocking particles into the atmosphere, as well as the collapse of industry in the Soviet Union or the economic growth of China, ..."

    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.

  • by Xyrus (755017) on Wednesday December 26, 2012 @12:17AM (#42392349) Journal

    Insurance needs fear to sell.

    No it doesn't. People buy insurance because MOST don't have enough funds to cover things like car crashes, unexpected serious illnesses, etc. . These things happen and the LOGICAL response is to be prepared for them. At worst, that could be considered cautious.

    However here is a fear that is irrational Climate change the climate always changes, day to day , year to year, century to century.

    Weather != Climate. Climate changes TYPICALLY happen over 100's to 1000's of years, sometimes even longer. And the impacts of those changes on the life forms existing on the planet depend on how string and how fast those changes happen.

    The changes, as indicated by all the research, observations, and data we have show that the climate is changing, and rapidly (decadal scale). There is no irrational fear here. The science says A is going to happen, evidence shows A is happening, and that there are consequences for A happening. Groups that are interested about these consequences and what their effects will be such as the DoD, DoE, insurance companies, agribusiness, etc. are incorporating the science into future plans to prepare for it.

    And the difficulty will be was the damages caused by climate change or were you in a flood zone anyway.

    What your describing is called attribution, an it's pretty easy to filter out such basic cases. Attribution of weather event to climate change is more difficult, but that's another matter. As water levels rise, flood zones will increase (at least in coastal areas). Storm surges will become more dangerous and travel further inland.

    That's just an example, but these are things city planners and others need to be aware of when making long range plans. Otherwise, when those 1 in a thousand year events start becoming one every ten years there's going to be a heavy bill to pay.

    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.

    You don't seem to understand coastal flood zones very well. Storm surges, even those not driven by hurricanes, can easily exceed 2 or 3 meters. Even coastal winds can drive waves that size depending on where you live. And if such events have been shown to be happening more frequently in your area due to a combination of increasing extreme events, ocean rise, coastal erosion, etc. then it only make sense.

    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

    You're going to need more than emotional appeal to win an argument. You have to get some real hard data and show WHY you think the increase is unnecessary. How often does the area flood? How much value does the area have? What is the projected increase in flooding events as sea levels rise? What is the projected increase of conditions that would lead to probable flooding? Insurance companies use a lot of information to estimate risks and determine premiums. If you don't have a solid provable case you basically just whining that your premiums had to go up to cover the increasing risk due to a changing climate.

    This shouldn't be a surprise to you, as scientist have been saying these types of things would likely happen 30 years ago.

  • Hurricane Sandy.... (Score:5, Informative)

    by Ferretman (224859) <ferretman&gameai,com> on Wednesday December 26, 2012 @12:18AM (#42392353) Homepage
    ....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/ [nationalgeographic.com]

    Ferret

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