Insurance and Climate Change

Table of Contents

Introduction to Insurance and Climate Change	1
A Surprisingly Difficult Subject	1
Junk Science or Verifiable Science	3
Spilled Milk	7
Who Should We Believe?	10
Photosynthesis: The Role Plants and Trees Play	12
Volcanic Activity	13
Policy Exclusions	17
Past Climate Changes Before Use of Fossil Fuels	19
Asteroids	21
Government Actions	26
Climate Change Risk Management	29
Insurers Recognize the Risks	29
Multiple Programs Affected	29
Government Insurance Programs Pay Out Higher Losses	34
Insects, Weeds, and Diseases	35
Livestock Insurance	36
Agricultural Business Insurance	36
General Liability Insurance	37
Property Insurance	38
Farm Employee Insurance	40
Over-the-Road Vehicle Insurance	41
Crop/Income Insurance	42
Other Types of Insurance	43
More Heat, Drought and Precipitation to Come to Agriculture (& Insurers)	44
Forests	47
Bioenergy: Plant-Based Material	50
The Future of Forests	51
Water	52
Severe Weather Events	54
Plants and Animals	55
Seasonal Patterns Eventually Equate into Insurance Losses	57
Species Adaptation	58
Health Insurance	59
Air Pollution Increases Health Care Claims	60
Allergens Cause Health Care Issues	61
Temperature Extremes Affect the Life & Health Industry	62
Weather Events Cause Related Deaths and Injuries	62
Heavy Downpours Cause Health Issues	63
Food Security Affects Health, so Affects Insurance	64
Mental Health and Stress-related Disorders	65
The Vulnerable Are Always at the Highest Risk	65
Defining Global Warming and Its Causes	67
Defining the Risk and How Insurers Are Affected	67
Defining Fossil Fuels and their Relationship to Insurers	68
Reinsurance Companies Consider Global Warming Risks	70
If Human Activity is Thought to be Responsible	73
Oil	74
Coal	74
Natural Gas	75
Fracking and the Role Insurance Will Eventually Play	76
Energy Alternatives	82
Looking at Solutions	83
Options Exist	83
Insurance Solutions to Global Warming	85
Global Warming and Wildlife	87
“Supposing” Future Claims Experience	89
Civil Litigation Equates into Liability Claims	92
Measurable Risks Are Required	93
Micro Insurance	94
Reducing Loss Risks Associated with Climate Change	97
Catastrophe Reserve Funds	98
Risk Pools	98
Insurance-Linked Securities	98
Insurers have been Aware of Climate Changes	98
Insurer Incentives to Reduce Use of Fossil Fuels	99
New pipelines	99
Text of the Keep-It-in-the-Ground Act of 2015	100
Many Confusing Opinions and Offered Solutions	104
The Nicholas Stern 2006 Review	107
Global Warming: Doing Something is Costly Doing Nothing is Costlier	107
Insurers Understand the Effects of Automobile Emissions	109
Winners and Losers in Climate Change Issues	111
Climate Change Affects Insurance Companies and Policyholders	114
Risk Knowledge and Management	116
Assessing Risk	121
Insurers Must Act	126
Department of Commerce Estimations	135
NFIP: What is the Message for Taxpayers?	137
Europe Ahead of America in the Reality Category	141
Litigation Risk Due to Both Actions & Inactions Related to Climate Change	143
Physical Risks	147
Transition Risks	147
Liability Risks	147
Driving Factors	147
Insurer Risk is Increasing	148
Insurance Categories	149
Business Interruption Losses	150
Food Safety and Insurance	150
Global Security Also Impacted	151
General Insurance and Liability Affected	151
It is All in the Math	151
Wake-Up Calls to Insurers	152
Insurers Invest Too	152
Dealing with Transition Risks	153
Liability Risks	154
Professional Indemnity	157
Making Assessments	158
As Always, Opinions Vary	159
International Collaboration	161
Developing New Insurance Products	162
Insurance Impacts from Global Warming	162
Life Insurance	162
Health Insurance	163
Insurers Recognized It First (After Scientists that is)	167
Concepts of Insurability	169
The Ethics of Climate Change	171
Climate Change: An Ethical Issue	171
The Poorest of the Poor	172
Predicting and Coping	174
What’s in a Name?	176
Climate Change: A Moral Issue	189
It Starts at the Top	201
Giving the Subject Legitimacy	201
Making Global Warming Personally Relevant	202
Regulatory and Political Risks	203
From a Practical Standpoint	208
Choosing Ethical Conduct	209
Ethics Beyond Philosophers	210
Being Ethically Responsible	211
Responsibility to Others	212
A Legal Liability	214
Free Choice	215
Egoism	217
Objectivist Theory	218
Cultural Ethics; Perceptions of Ethics	220
Moral Persuasion	221
Rationalizing Morals	222

United Insurance Educators, Inc.

PO BOX 1030

Eatonville, WA  98328

(253) 846-1155