Published on November 17th, 2009 | by Susan Kraemer2
Property Insurance In Danger From Climate Change Says Industry
Property insurance may no longer be available in the future if we can’t get control of climate change, says Nick Starling, the Director of General Insurance and Health for the Association of British Insurers. Climate change could end the continuing availability of property insurance.
The insurance industry might be overwhelmed by losses and no longer be able to pay out for property losses with increased climate change, the Association of British Insurers announced this week.
Having examined scientific research commissioned by the British Meteorological Office, the ABI found that even the minimum of 3.6 degrees Fahrenheit rise in global average temperatures (2 C) would increase annual British property losses to $77 million from inland flooding and windstorms.
A global average temperature rise of 10.8 F (6 C) was also played out in scenarios, along with average global rise of 7.2 F (4 C) as well. At those levels the Director of General Insurance and Health for the Association of British Insurers said property insurance would simply no longer be possible for the insurance industry, which depends on actuarial history to determine risk.
Humanity is now moving completely outside of risk levels associated with human history.
Even covering potential higher risks associated with a 2 C rise would create an increase in capital requirements for the industry. Professor Julia Slingo, Chief Scientist at the Met Office warned that a temperature rise to 4C would make some parts of the world uninhabitable.
“We have committed to a different world than the one we are used to,” she told the ABI’s Climate Change conference.
A different world is one with, among other things, no property insurance to protect homeowners in the future. Our grandchildren will be very much on their own in the sad future we are making for them.
Source: Carbon Based