Insurance regulators are calling for insurers to become more prepared for climate change
Insurance regulators in the United States may be growing more supportive of efforts to combat climate change. This climatic phenomenon has the potential to be the most disruptive force that the insurance industry has faced in its long history. Regulators throughout the country, represented by the National Association of Insurance Commissioners, are calling for the insurance industry to take climate change more seriously and help businesses prepare for the potential impact of this phenomenon.
Regulators are becoming more aggressive in ensuring insurers are aware of climate change risks
Insurance Commissioner Mike Keidler of Washington notes that regulators have a responsibility to ensure that the insurance industry remains solvent and that it does not compromise its ability to fulfill policies. The National Association of Insurance Commissioners’ Climate Change and Global Warming Working Group will begin focusing more on ensuring that insurers understand the risks associated with climate change. The organization sees a potential problem with insurers conducting business “as usual” and not taking into account the risks associated with the growing intensity and frequency of natural disasters.
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Organization continues to monitor the risks associated with climate change
The National Association of Insurance Commissioners has been monitoring the risks associated with climate change for nearly a decade now. The phenomenon is producing natural disasters of a devastating nature, which has been exampled in disasters like Hurricane Sandy. These disasters can cause serious damage to properties and leave consumers and businesses in financial distress. The severity of natural disasters could also deplete the capital of an insurance organization, making it unable to honor the policies that it is responsible for.
Survey finds that insurance industry is woefully unprepared to handle climate change
Insurance regulators have been running a survey, called the Insurer Climate Risk Disclosure Survey, since 2010. The survey is managed by Ceres, a non-profit sustainability advocacy organization. In the most recent survey, Ceres found that the majority of the insurance industry has a “profound lack of preparedness in addressing climate-related risks and opportunities.”