Sunday, April 5

Insurance Companies: The New Climate Ally?

Insurance companies might not come to mind as key environmental advocates, but they have a vested interest in climate change: billions—if not trillions—of dollars. As sea levels rise, storms gain force and even as agricultural patterns change, insurance companies will have to shell out more and more cash to cover losses. Hurricane Ike, which struck the Texas coast in 2008, cost insurers in that state $6.6 billion, according to a report by The New York Times. Hefty price tags get passed along to consumers, taxpayers and investors alike.

But a new industry survey by the National Association of Insurance Commissioners (NAIC), a nationwide advisory organization, aims to ensure that insurers are taking a long, hard look at climate change and what it means for their bottom line.

"Once they're aware of the risk," says Pennsylvania Insurance Commissioner Joel Ario, "they'll mitigate it." Mitigation in this case doesn't just mean upping premiums or dropping coverage, but actually working to reduce climate change overall. Just as insurance companies helped to make workplaces safer (not because they're altruistic, rather because it makes good business sense—lower risk cuts costs), they "can help foster improvements in global warming," says Peter Kochenburger, executive director of the Insurance Law Center at the University of Connecticut School of Law. Read more...

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