While climate change poses many challenges and risks for insurers, it can also present opportunities for companies willing to innovate and stay ahead of the game, says Dan Brown, partner, Dentons.
In the US and abroad, there is a growing acknowledgement of global climate change and the potential increase in personal and commercial risks as a result. Climate change is a hot button topic in politics, evoking arguments between the right and left. Insurance companies have thus far indicated a preference to avoid controversies over energy policy, but insurers—including reinsurance companies that bear the ultimate risk—cannot afford to feign ignorance over the impacts of climate change primarily on property and casualty risks.
Arguments have been made that, on a global scale, there is no significant trend in global insured losses for weather events, such as flash floods, hail storms, tornados, lightning and more. These findings argue that the bigger problem is an accumulation of wealth in disaster-prone areas.
However, other studies point to a positive trend in insured losses in the US. Moreover, in a recent survey nearly 90 percent of S&P Global 100 Index companies identified extreme weather and climate change as current or future business risks.
US Insurers, Global Climate Change, Insurance, Dentons, Dan Brown, Bella Shirin