Perhaps the biggest advocate for action against climate change is coming from insurers, which paid out $50 billion in 2016 on such disaster-related claims. That’s nearly double that of 2015, or $27 billion. About $125 billion, interestingly, was not insured, meaning that either private owners lost or governments covered.
That’s according to reinsurer Munich Re, which made such a proclamation in its annual review of catastrophes, reports the AP. The biggest loses, it says, came from earthquakes in Japan and devastating floods in China.
Reinsurers are those companies that are used as backstops for traditional insurers, which take on risks but which then parcel the biggest share to a so-called reinsurer that covers the balance. Those reinsurers step in, for example, to insure against hurricanes — past the levels that the ordinary insurance companies take on.
It was the costliest 12 months for natural catastrophe damage after three years of relatively low losses, and above the 10-year average of $45.1 billion, the AP reported. “Losses in a single year are obviously random and cannot be seen as a trend,” added board member Torsten Jeworrek, in the story. “The high percentage of uninsured losses, especially in emerging markets and developing countries, remains a concern.”
While insurers have become a force in the fight against climate change, they have just recently begun to get the political wings — and they still have a long ways to go. But given that some of them are in the midst of paying about $6 billion in claims from Hurricane Matthew, it is in their interest to make waves, no pun intended.
A Ceres’ report that was published last week notes that Matthew is the country’s 13th billion dollar-plus weather event this year. It adds that while the insurance industry is taking a more proactive role, it is still somewhat complacent. Its involvement ranges from insulating itself against excessive property damages to financing the tools that make a low-carbon economy possible.
In fact, 22 insurance companies out of 148 that Ceres interviewed give serious consideration to climate change when evaluating risks. They include: American International Group, Hartford Financial Services Group, Manulife Financial Corp., Travelers Cos., Zurich Insurance Group.
Other insurers, meanwhile, have broken ties to the Heartland Institute that believes climate change is a cyclical phenomenon — not a man-made one resulting from the over-reliance of fossil fuels. That’s one reason why Allied World Assurance Co., State Farm, Renaissance Re and XL Group are no longer financial supporters of the group.
“We include environmental, social and governance considerations in our investment analysis to ensure we manage these risks appropriately,” says Warren Thomson, chief investment officer for Manulife Finance, parent of John Hancock. “Insurers are playing an important role in financing the transition to a lower carbon economy.”
17 of the warmest years on record have occurred in the last 18 years, says Dr. Kathleen Miller, with the National Center for Atmospheric Research. And 2015 was, in fact, the hottest ever.
One of things that the climate skeptics will point to, she notes, is that a short-term trend can indicate a “warming pause.” But she emphasizes that short-term trend calculations can be manipulated by selecting an unusually warm starting point. The longer-term trend paints a different picture.