Insurers Hip to Climate Change

CERES, a coalition of investor groups, environmental organizations and investment funds, along with the Heinz Center, a environmental policy group, issued a report on the dangers to US seacoast from the changing climate. Endorsed by many of the biggest insurance companies, including Travelers, Fireman’s Fund and Lloyd’s it starts off with a stark recitation of the economic facts.

Powerful storms are wreaking increasing havoc along the world’s coasts, as Hurricane Katrina and Cyclone Nagris indelibly demonstrated. A recent assessment by the Wharton School’s Risk Center revealed a dramatic surge in global economic losses from natural disasters, increasing from just over $50 billion in the 1950s to almost $800 billion in the 1990s, with about $420.6 billion so far in the current decade (through 2007)1. Munich Re estimated worldwide economic losses from natural catastrophes at $200 billion for 2008, up from $82 billion in 2007. Lloyd’s of London and Risk Management Solutions (RMS) predict that flood losses along tropical Atlantic coastlines would increase 80 percent by 2030 with about one foot of sea level rise3 – in line with the conservative estimates of the 2007 report of the Intergovernmental Panel on Climate Change.

The purpose of the Resilient Coasts Blueprint is to put forth what are called the “basic principles for making the coasts more resilient” in the face of expected storm costs. Over half of the U.S. population lives in coastal counties. It is directed to Congress, the Administration, state and local leaders as well as those in the business sector. It says:

Use science. Reduce risks. Plan for storms. Build smarter. Use nature to protect itself and us; don’t destroy it. Recast investment risk with weather in mind.

A comprehensive set of guidelines from those who have a big stake in the outcome. I hope their lobbying groups can match those of gas, coal and oil still saying not to worry, nothing there.

A Cornelia Dean article in the NY Times about the initiative.

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