Insurance, Politics & Climate Change

Part 1

Table of Contents

Chapter 1:  Introduction to Insurance, Politics & Climate Change	1
Is Climate Change Real?	2
Insurers See the Writing on the Wall; People Just See the Wall	2
Dude! This is About Weather!	3
A Surprisingly Difficult Topic	5
A Complicated Insurance Topic	6
Insurers Look at Financial Risks, Not Politics	9
Facts are Verified; Insurance Companies Weigh In	10
Insurers Possess Knowledge	11
A Constant Attempt to Muddy the Information Waters	13
Insurers Pick Up the Claims, and Raise Premiums	14
Insurers Assess Global Change Risks	15
Insurance Claim Tails	17
NAIC Looks at Economic Threats to Insurer Stability	18
Chapter 2:  Spilled Milk	21
From an Insurance Perspective	23
Flood Risk and the NFIP	25
Other NFIP Issues	26
H.R. 5381	28
Climate Change: A Financial Issue for Insurers	29
Violent Conflicts	29
Climate Change or Simply Bad Luck?	30
A Difficult Concept for Some People	30
Change and the Unknown Can be Frightening	30
Lack of Understanding Affects Acquired Knowledge	31
Financial Gains Affects Climate Change Statements	31
Inability or Unwillingness to Perform Personal Analysis	32
Financial Gains Determine Opinions	33
Moving Forward	33
Identifying the Skeptics	34
How Can Insurers Meet the Climate Challenge?	35
Today’s Political Atmosphere Molds the Actions of Insurers	37
Insurers must deal with a Political Climate	41
Distributional Politics Affect Insurance	43
A Tough Situation for Insurers	43
Insurance Statistics	45
Climate Mitigation is Broader than Most People Realize	45
Canada / Insurer Assessments of the Future	47
Believe the Insurers, Not the Politicians	49
Adding Billions of People Make this Climate Change Different	50
Photosynthesis: The Role Plants and Trees Play	53
Insuring Volcanic Activity	55
Hawaii & Alaska	57
Pacific Coast / Wyoming and the Rockies / Volcanoes in General	58
Unusual Events Can Affect Insurance Policies	59
Policy Exclusions	60
Past Climate Change Before Use of Fossil Fuels	61
Asteroids	64
Insurance & Government Actions Related to Climate Change	69
Pew Research Center surveys	71
Chapter 3:  Climate Change Risk Management	74
Insures Recognize the Risk	74
Crop Loss Equates to Insurance Payments	76
Insurance Premiums Impact Food Pricing	79
Government Insurance Programs Pay Out Higher Losses	84
Insects, Weeds & Diseases	86
Livestock Insurance	86
Agricultural Business Insurance	87
General Liability Insurance	88
Property Insurance	89
RCV, ACV, FRC	90
Farm Employee Insurance	91
Over-the-Road Vehicle Insurance	92
Crop/Income Insurance	93
Other Types of Insurance	93
More Heat, Drought & Precipitation to Come to Agriculture & Insurers	94
Consequences on food security in U.S. and Canada	97
Forests	97
Bioenergy: Plant-Based Material	101
The Future of Forests	102
Chapter 4:  Our Planet’s Future	104
Water	104
Like Insurance, Ecosystems Buffer Severe Weather Events	106
Plants and Animals	106
NOAA	108
Seasonal Patterns Eventually Equate into Insurance Losses	109
Adaption Required in Insurance as well as Species	110
Health Insurance	112
Air Pollution Increases Health Care Claims	112
Allergens Cause Health Care Issues	113
Temperature Extremes Affect the Life & Health Insurance Industry Too	114
Weather Events Cause Related Deaths & Injuries (So More Claims)	115
Heavy Downpours Cause Health Issues	116
Food Security Affects Health, so Affects Insurance	117
Mental Health & Stress-related Disorders	117
Vulnerable Individuals Face the Highest Risk	118
Defining the Risks & How Insurers Respond	120
Defining Fossil Fuels & their Relationship to Insurers	121
Reinsurance Companies Consider Global Warming Risks	122
Insurers do not care whether Climate Change is Human Caused	123
Oil	124
Coal	125
Natural Gas	125
Environmental Impairment Liability Insurance (EIL)	127
Specialty Policies	131
Upstream Emissions	132
Energy Alternatives	133
Looking at Solutions	133
Options Exist	134
Insurance Solutions to Global Warming	136
Loss Predictability	137
Global Warming, Wildlife and Livestock	138
“Supposing” Future Claims Experience	140
Civil Litigation Equates to Liability Claims	142
Measurable Risks Are Required	143
Micro Insurance	144
Desertification	145
Often referred to as community-based financing	147
Reducing Loss Risks Associated with Climate Change	148
Catastrophe Reserve Funds	149
Risk Pools	149
Insurance-Linked Securities	149
Insurers have been Aware of Climate Change	149
Insurer Incentives to Reduce Us of Fossil Fuels	149
New Pipelines	150
Many Confusing Opinions & Offered Solutions	150
Intergovernmental Panel on Climate Change report	152
The Nicholas Stern 2006 Review	154
Insurers Understand the Effects of Automobile Emissions	155
How People Live Has Always Changed with Time	160
Winners & Losers in Climate Change Issues	163
Why We Must Believe in Insurers	164

United Insurance Educators, Inc.

PO Box 1030

Eatonville, WA  98328

(253) 846-1155