Insurance industry may be woefully unprepared for climate change

rain umbrella coverage insurance industry climate change

Survey finds that majority of US insurers are not prepared to deal with climate risks

Ceres, an environmental investor advocacy group, has released the results of a new survey it has conducted in the insurance industry. According to the survey, the majority of U.S. insurance companies are woefully unprepared to handle the risks associated with climate change. While many insurers have been relatively cavalier with their claims that not enough is being done to mitigate climate change, several companies have done little to prepare themselves for future environmental risks.

10% of US insurance companies have announced plans to tackle climate issues

According to the survey, only 10% of insurers operating in the U.S. have made public climate change management statements, offering information about what these companies plan to do about the issue. These companies have made little to no effort to showcase the steps they are taking to make use of climate risk management programs or how they are approaching core underwriting and investment issues that could be influenced by a changing climate.

The property casualty sector is most prepared to combat environmental risks

rain umbrella coverage insurance industry climate changeProperty insurers are more prepared to address environmental risks than others, according to the survey. These insurance companies are likely to see the most impact from climate change and many have taken steps to make themselves more resilient against climate-related problems. Health insurers are somewhat less prepared, with the survey finding that these insurers are “not addressing climate risks comprehensively.”

Politics may be one of the reasons insurers are avoiding climate change

One of the reasons insurers may be relatively quiet about climate change is that it has become a very politicized issue. Politics in the United States is polarized and aligning with certain political ideologies can have very significant consequences for a business. Insurers can quickly become targets for politicians that use climate change and other environmental issues as political platforms. The survey also notes that some insurers are concerned that their customers could be exposed to lawsuits that are related to climate change and many companies are not prepared to adequately handle this particular risk.

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