Lloyd’s of London has revealed that it is starting to look into potential catastrophes from the new reality.
Lloyd’s of London has just released a document that is rather unsettling to insurance agents in the way that it has shown that it is currently exploring potential apocalyptic disasters that could result from the impact of climate change on the current structure of the world.
The report detailed the way that there could essentially be a worldwide meltdown from a food supply chain failure.
This was far from the type of report that insurance agents are pleased to see, but it reveals that climate change will be altering the types of risk that the world as a whole will be facing. The report examined the potential outcomes if only three major weather events (such as too much rain in one place, drought in another place, and disease in a third location) caused the crop yields to stumble. What was determined was that even a slight decrease in core crops (such as wheat, rice, and soybeans) could cause food prices to soar, riots to break out, and instability in politics and the stock markets.
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Insurance agents would be the ones on the front line if any of this type of disaster should play out.
Insurance companies are paying close attention to this type of report because their success depends on properly implementing strategies that will be able to keep them on top of even the worst disasters. This means that they need to be aware of the types of things that could possibly go wrong, as they are the ones who will be paying out the claims when it happens.
The report told insurance agents that a systemic shock to the worldwide food chain could bring on massive claims across a range of different types of coverage, such as political risk, political violence and terrorism, marine and aviation, business interruption, product liability and recall, environmental liability and, of course, agriculture. While this has always been the case, the added influence of climate change has only placed greater pressure on the global food supply.