The Connecticut and Minnesota Departments of Insurance have joined California, New York and Washington in requiring insurers respond to the Climate Risk Survey adopted in 2009 by the National Association of Insurance Commissioners.
Despite NAIC approval in 2009, the remaining 45 states have declined to administer the survey.
California Insurance Commissioner Dave Jones has also expanded the survey scope by requiring all companies writing more than $100 million in direct written premium to respond to the climate risk survey — effectively doubling the number of companies surveyed. The decision to expand the survey will give investors and policyholders a better idea of how insurers are responding to climate change, Jones says.
Surveying the insurance industry’s response to the impacts of climate change has allowed state insurance departments to identify trends, vulnerabilities and best practices by insurance companies. For example, in California, the survey showed that Fireman’s Fund is a leader in responding to climate change with new corporate policies and by offering “green” insurance products designed for LEED certified commercial properties.
The survey contains eight questions that measure companies’ responses to the impact of climate change. These questions range from carbon footprint reduction plans to risk management for a changing environment.
The 2012 survey responses are due Aug. 30.
Just one-eighth of US insurers surveyed by sustainability leadership advocate Ceres have comprehensive climate change strategies. The report, published in March, 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.
The US was seriously affected by weather extremes last year, accounting for 69 percent of overall losses and 92 percent of insured losses due to natural catastrophes worldwide, according to a Worldwatch Institute report published in May.
Hurricane Sandy, the summer-long drought in the Midwest and severe storms with tornadoes accounted for $100 billion of those global overall losses, the report says. The insurance industry covered $58 billion of the losses. These losses were the second highest overall and insured losses since 1980 in the US.