Will the global insurance industry save us from climate change?
Earth Day turned a lot of heads toward the critical environmental issues we’re facing.
The global insurance industry has stepped up and has shown that it was listening when scientists around the world made it clear that the top message they wanted to share on Earth Day 2016 was that the planet’s temperatures are rising.
Regardless of whether people agree with the cause of the matter, it is happening in a measurable way.
Why is the global insurance industry showing concern? For one thing, it’s made up of people who, like everyone else, are worried about what this could mean to their futures and the future of the world. However, it should also be recognized that insurers and reinsurance companies stand among those who will be the most heavily impacted as weather patterns change. These are the companies that will have to foot the bill as flooding, wind storms, draughts and other weather related disasters leave catastrophe in their wakes.
The global insurance industry joined in with the scientists on Earth Day 2016 in promoting climate change awareness.
According to Torsen Jeworrek, board member at Munich Re, “The heavy losses caused by weather-related natural catastrophes in the USA showed that greater loss-prevention efforts are needed.” Jeworrek pointed out that in the United States alone, there had been $400 billion in damages that were weather-related in 2011. Among those, $119 billion were insured losses – a record-breaking amount that was faced by insurance companies that year.
The insurance industry was used as a prime example of the way that more frequent and severe storms, more common floods and more persistent droughts aren’t just threatening the ecology of the world. They are also placing commerce in danger. Insurance companies are among those at the greatest risk. After all, they are often among the first responders in terms of the financial impact – for both personal and commercial customers – of extreme weather.
This is leading the price of insurance coverage to rise as insurers battle to make certain that the premiums they collect will cover the massive costs associated with weather-related catastrophes.
On Friday, Earth Day, more than 150 dignitaries met at the United Nations in order to sign a worldwide climate treaty to which they originally agreed in December in Paris. The hope is not to stop the rising temperatures that have already been impacting the global insurance industry. Instead, the goal is to try to slow the climate change that is occurring as a direct result of human activity which, at its current rate, will cause a temperature rise of more than 2 Celsius degrees by mid-century.