Insurer: Climate not a main driver of rising losses; ‘Main drivers are increases in population and in wealth’

The Financial Times reports:

However, the role of climate change in contributing to the rise in insurance losses remains contentious.

Economic growth has played a much more important role, say several scientists and insurance executives. Rising insurance losses driven by development are not necessarily problematic as they should be accompanied by a corresponding increase in premium income.

“The main drivers of the [rising] losses are mainly increases in population and in wealth,” says Ernst Rauch, head of the corporate climate centre at the reinsurer Munich Re.

He says in some regions – the US and parts of Europe – “it is likely there is a connection between the changing weather patterns and the losses”, but adds that the effect is impossible to quantify.

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5 thoughts on “Insurer: Climate not a main driver of rising losses; ‘Main drivers are increases in population and in wealth’”

  1. If someone builds a house that would be endangered by a 13″ rise over a century, they shouldn’t be insured in the first place.

  2. I’d go out on a limb and say that every insurer understands these two main drivers of losses. Some, for marketing, PR and profitability, would prefer to use global warming as a driver of premium increases.

  3. It is interesting to note however that the seas have been rising naturally about 13″ per decade. You would think it would be sensible to make homes 13″ higher above sea level now to account for the normal rise. Insurance might take that into account.

    (Note that for the last 18000 years the sea level has averaged 26″ per century – in fits fits and spurts)

  4. Well, since the climate is always changing so, yes, it’s effect is and always will be impossible to quantify!

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