After two years of devastating storms throughout the U.S., many states are wondering if the insurance industry is taking the proper steps to prepare for what the future may hold. Legislators and regulators in California, Washington and New York are now pressuring insurers for answers on what they are doing to adapt to climate change. This marks one of the first times state officials have clearly identified climate change as an issue, something the insurance industry has been doing for years now.
Next month, numerous insurance executives, experts and regulators will be meeting in Springfield, Illinois, to discuss the issue of climate change and the use of weather models. Meteorologists will also attend the meeting, providing valuable historic weather information that will show how weather trends have changed over time. During the meeting, insurers will discuss whether current risk models are adequate and if there is necessity to change them or create new models.
Though climate change is still a controversial issue, it will be a topic of discussion during the meeting next month. Insurers have long been inclined to consider climate change as a serious possibility. The industry relies on risk models to determine their potential liability. These risk models are constantly updated, which keeps insurers in the loop concerning in changes in the environment. Insurers are unlikely to carry the full burden of climate change, however, and may pressure state legislators to enact new laws that mitigate the effects of climate change in the future.