Insurance Industry Looking Hard At Climate Change 156
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."
Death throes of climate alarmism (Score:4, Interesting)
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/ [wattsupwiththat.com]
Re:Externalities come home to roost (Score:4, Interesting)
The thing is, it's not about overall cost to prevent vs to allow. It's about which is more predictable and easier to be profited from.
Tanking a well run company is a tremendous profit for those in the know, and turning things around at the right time doubly so.
A war is extremely expensive and wasteful, but extremely profitable to those well positioned.
Bubbles are manufactured, the follow predictable patterns and allow profits on the upside and the downside.
Allowing these things to happen is just another example of privatizing profit and socializing losses.
The real question is, how many deniers are secretly believers?
Re:Who knew... (Score:5, Interesting)
Of course in a most twisted way they could prove useful. Those pollution producing corporations are becoming a bit too much of a profit burden, which would be cheaper, eliminating them or paying out of the damage they are generating. When targeting the cause is order of magnitude cheaper than paying for the damage. Strange things can happen out there in corporate wars lobbyists land. Politically you can already see distinct corporate alignments forming, copyright versus technology, financial versus energy (only certain forms) and, development versus military. How violent will the corporate wars become?
Re:On the other hand... (Score:3, Interesting)
Result: Huge rises in insurance rates while hurricane numbers and intensity went down.
Big result: Huge profits for reinsurance companies
Carelessly picked buildsites (Score:3, Interesting)
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.
Re:Who knew... (Score:5, Interesting)
Would you rather your insurance company just hand out cash willy nilly?
Mo, of course not. But guess what? Insurance companies hire these people call - get this - Insurance Adjusters, who are - get this - "professionals" at evaluating claims.
But you know what? Most of them only look for reasons *NOT* to pay out on legitimate claims.
Oh wait 'your' emergency is somehow obvious and more important than everybody elses?
What an angry ignorant statement.
My claim is no more or less important than any other legitimate claim. Perhaps you need to look into how insurance companies deny legitimate claims?
Or perhaps you are one of these assholes that insurance companies hire to bullshit people out of making legitimate claims?
We're not talking about "entitlements" here, we're talking about paying for a service and not getting it.
But please, fuck off.
Let me google that for you (Score:4, Interesting)
Oh look, I found an interesting discussion [yahoo.com] 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: