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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 @04:31PM (#42389797)

    as well as the banking industry are corrupt and need to go away.

  • Who knew... (Score:5, Insightful)

    by Frosty Piss (770223) * on Tuesday December 25, 2012 @04:44PM (#42389885)

    God forbid someone actually get some actual benefit from their insurance...

  • by presidenteloco (659168) on Tuesday December 25, 2012 @04:50PM (#42389925)

    Global warming has already been forecast http://en.wikipedia.org/wiki/Stern_Review [wikipedia.org] 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?

  • Haha (Score:1, Insightful)

    by Anonymous Coward on Tuesday December 25, 2012 @04:53PM (#42389931)

    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.

  • by harvey the nerd (582806) on Tuesday December 25, 2012 @05:49PM (#42390249)
    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.
  • by Anonymous Coward on Tuesday December 25, 2012 @06:07PM (#42390357)

    Where are YOUR facts? You provide even LESS than the "parent".

  • by SilenceBE (1439827) on Tuesday December 25, 2012 @06:31PM (#42390489)
    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.
  • by cirby (2599) on Tuesday December 25, 2012 @06:37PM (#42390503)

    ...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?"

  • by pseudonymnal (1963912) <wheelspam@gmail.cERDOSom minus math_god> on Tuesday December 25, 2012 @06:50PM (#42390589)
    You mean actuaries, and they are.
  • by vlad30 (44644) on Tuesday December 25, 2012 @07:38PM (#42390833)
    Insurance needs fear to sell.

    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

  • by the gnat (153162) on Tuesday December 25, 2012 @07:45PM (#42390875)

    it's those who scream the loudest about global warming that want us to wait twenty years until we can switch to renewable power sources.

    Straw man. Ask most actual scientists who know anything about the topic, and we'll tell you we should be building nuclear power plants as fast as possible. (And yes, I would happily live near one, although since I live practically on top of a fault line it would be a pretty stupid place to build it.)

  • by taz346 (2715665) on Tuesday December 25, 2012 @07:53PM (#42390925)
    We see more stories about global warming on Slashdot lately because more of the predicted effects are becoming reality. That trend will continue because we will continue to do nothing to address it, opting to put our own short-term interests ahead of the costs to future generations. Nothing new there. Just ask Yeats: "The best lack all conviction, while the worst Are full of passionate intensity."
  • by SerpentMage (13390) <ChristianHGross@ ... .ca minus distro> on Tuesday December 25, 2012 @08:35PM (#42391177)

    Dude here is what you don't get. The insurance industry does not give a rats ass on the foaming mouths of those who are for or against climate change. The only thing that the insurance industry cares about is making money. Let's say that California is in an earthquake zone, which it is, the insurance company says, "hey guess what you are going to pay more for earth quake insurance." When the big one hits they really don't care because they should have covered their butts.

    This is why if some hurricane were to flatten New York the only question that the insurance industry will ask is, "how much money will we make or NOT?" Thus by seeing that climate change is starting to hurt their pocket books you can be sure as American Greenbacks being green that they will begin to pay attention and charge you more for insurance.

  • by harvey the nerd (582806) on Wednesday December 26, 2012 @03:10AM (#42392729)
    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/ [curiouscatblog.net]

    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.
  • Re:Who knew... (Score:4, Insightful)

    by mcgrew (92797) * on Wednesday December 26, 2012 @11:02AM (#42394543) Homepage Journal

    We're not talking about "entitlements" here, we're talking about paying for a service and not getting it.

    I don't how the Republicans got "entitlements" to be a dirty word, as if getting an "entitlement" is getting a handout. If I pay for a service, I'm entitled to that service, whether insurance or Social Security.

    It is indeed an entitlement. You paid your money, you are entitled to the payout.

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