Wednesday, July 20, 2011

Insurance Corporations Believe In Climate Change

Never let it be said that all of the banks and corporations on the planet have their head in the sand when it comes to climate change. Why, just recently, I received a letter from my home insurance provider telling me about some important changes to my policy, which needed to take into account the effects of climate change.
" recent years, the Canadian residential insurance industry has experienced a steady increase in the number of claims related to natural disaster and water related events. Due to changes in the climate and weather patterns, residential insurance providers are seeing an increase in weather-related claims, resulting in increases to insurance premiums for residential policies..."
The upshot is: they're cancelling any coverage of water related damage that is the result of weather events. Two things are interesting here. The first, of course, is that capitalism produces organizations - banks and corporations - that are thoroughly sociopathic in action (if not in intent). The pursuit of profit means that human need - like the need to have my house repaired when a fucking hurricane blows through unannounced as a result of an increase in extreme weather events (just as an example) - are subordinate to the insurance company's pathological need to make a buck off of me.

WTF? I thought insurance was supposed to protect me
from things like weather events
This isn't because insurance company CEOs are bastards (though I believe in my heart of hearts that they are). This is an example of structural dynamics overdetermining the intentions of any of the players. If insurance company A doesn't fuck me over, they will lose their competitive edge in comparison with insurance company B. B's higher profits will put it in the position of being able to seize market share from A and, perhaps down the line, buy out and subordinate A. Or A will go bankrupt. Knowing this, the people at the top of the insurance companies are driven to behave in ways that make them into bastards in practice, if not in intent. Generalize that dynamic over the entire economy and you have a pathological society where solidarity is subordinated to greed. And I don't mean greed in the moral sense of the term but rather in the pitiless drive to accumulate for the sake of accumulating.

The second thing that is interesting is that the insurance industry has statistics on the increase in damages that have been caused as a result of weather events, providing a concrete, dollar figure proof of some of the effects of climate change. Or, so they claim. Perhaps they are just bullshitting and don't have any such figures but are using climate change as a useful excuse to screw me. If it's not all a big lie, has anybody accessed these figures to bolster the arguments around climate change from a measurable cost perspective - i.e. as a riposte to the troglodytes who call themselves climate change deniers or skeptics and even more so to the politicians who accept the existence of climate change but argue that doing anything substantial about it is too expensive. Certainly the human and environmental costs are enough to justify expending resources that might otherwise go to, oh, the F-35 boondoggle, or the subsidies that go to the planet-destroying tar sands. But it couldn't hurt to be able to point to an industry source that demonstrates that climate change is costing us a measurable amount of money already.


Guest said...

Drat those leftist liberals that own and operate the insurance industry! Climate change is supposed to be a myth promoted by kooky tree-huggers!

Michel Vanderby said...

I work in insurance. Insurance companies are interested in reducing risk and making money. Extreme weather is a risk and therefore they've researched it. There's nothing being hidden from the public and it's quite out in the open as reported in The Scientific American.

"Munich Re, one of the world's largest reinsurance companies, has compiled the world's most comprehensive database of natural disasters, reaching all the way back to the eruption of Mount Vesuvius in A.D. 79. Researchers at the company, which obviously has a keen financial interest in trends that increase insurance risks, add 700 to 1,000 natural catastrophes to the database each year, explains Mark Bove, senior research meteorologist in Munich Re's catastrophe risk management office in Princeton, N.J. The data indicate a small increase in geologic events like earthquakes since 1980 because of better reporting. But the increase in the number of climate disasters is far larger. "Our figures indicate a trend towards an increase in extreme weather events that can only be fully explained by climate change," says Peter Höppe, head of Munich Re's Geo Risks Research/Corporate Climate Center: "It's as if the weather machine had changed up a gear."

The climate change "debate" has long ceased to be based on facts by its deniers.

Shawn Whitney said...

Hey Michel - thanks very much for that link. I'm going to give that a read. What would also be interesting to me is what kind of linkages exist between the insurance companies and oil companies - are there interlocking boards, are insurance companies owned by oil companies or vice versa. It would certainly be something hidden from the public if insurance companies are reducing coverage based upon real research, while they are linked to oil companies that are funding climate denier "research" and lobbying against environmental legislation.

Michel Vanderby said...

I think you misunderstood me. It's in the insurance industry to reduce the risk of climate change. Extreme weather causes damage to businesses that - if covered in the policy - the insurance company have to pay out. So they don't like climate change and high variability. That's the kind of stuff that increases claims.

As for your particular situation, I highly recommend you discuss your home insurance policy with your broker (if you went through a broker). State that you'd like to find an insurance policy with flood coverage (if that's the clause that's been removed from your policy). I don't deal with homeowner's insurance so I couldn't tell you whether that's an option in your area. If you have a good claims record (read: none) over the last 5 years, shop your business around. They won't make any huge effort but insist you want conditions to be exactly as your expiring policy (including flood coverage) and premium, deductible and limits to remain the same (although you should start with the position that you want a better deal overall... mention this politely for optimal results). For new business, a broker (or a different insurance company) could find you a better deal. It'll take some time and effort on your part but you could get some good savings.

DreamHost Promotional Codes