Only 1 in 8 Insurers Has Climate Plan
The Ceres report, Insurer Climate Risk Disclosure Survey: 2012 Findings & Recommendations, is based on 184 company disclosures in response to a climate risk survey developed by insurance regulators. Ceres found only 23 companies – mainly large, foreign-owned and drawn from the property and casualty, life and annuity and health insurance sectors – that have comprehensive climate change strategies.
This year’s report surveyed many more companies but found little change from 2011, when Ceres said that only 11 out of 88 insurers surveyed had climate change policies.
Even among those companies with comprehensive climate strategies, the view of climate science is “remarkably diverse,” according to this year’s report.
For example, companies such as ACE are funding primary climate change research and Swiss Re and others lend their brand to efforts at the Intergovernmental Panel on Climate Change. However, companies including Allstate and Travelers express strong ambivalence about the state of the science – specifically, the existence of climate change and what is causing it.
Due to the insurance sector’s position as a key driver of the economy, Ceres calls the implications of this lack of preparedness “profound.” If climate change undermines the future availability of insurance products and risk management services in major markets throughout the US, it threatens the economy and taxpayers at the same time, Ceres says.
Eleven extreme weather events each caused at least $1 billion dollars in losses last year in the United States. Hurricane Sandy alone caused $50 billion in economic losses, including tens of billions of insured losses by property and casualty firms whose quarterly profits suffered as a result, Ceres says. Additionally, American taxpayers are absorbing even bigger financial hits thanks to losses sustained by the National Flood Insurance Program as well as growing costs for disaster relief spending, Ceres says.
In March last year, a report commissioned by the UK’s Department for Environment, Food and Rural Affairs found that while more than 80 percent of UK businesses say climate change is a substantial risk to them, only 46 percent of surveyed FTSE 100 companies say they have climate adaptation plans in their business strategies.
The report, which was carried out by the Carbon Disclosure Project, found that among those that have a strategy, the main focus is on assets, followed by logistics and finance.
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