Climate for Change an Actuarial Perspective on Global Warming and Its Potential Impact on Insurers
Reprinted from Contingencies: Journal of the American Academy of Actuaries, pp. 16-23, (January/February 1999 issue). Also available as Lawrence Berkeley National Laboratory Report No. 42580. Climate for Change An Actuarial Perspective on Global Warming and its Potential Impact on Insurers By Andy Peara and Evan Mills
As the debate over global warming rages, actuaries may be able to play a greater role in evaluating the merits of the opposing views and contributing to climate research itself.
Since hurricanes Hugo and Andrew, insurance companies have had to fundamentally rethink pricing, underwriting and financing for catastrophic weather-related coverage. Insurers also have had to consider whether these events were just a harbinger of things to come. If these storms presaged a changing climate, what could insurers do to prepare themselves for future catastrophes and improve their assessment of future risks? At the Conference on Climate Change and the Insurance Industry in 1993. Frank Nutter, president of the Reinsurance Association of America, drew much attention in the insurance and environmental press. In 1995, Nutter joined officials from six other major U.S. insurance organizations to discuss climate-related threats with Vice President Gore and experts on climate change. (The other organizations included: Alliance of American Insurers, American Insurance Association, Institute for Business and Home Safety, National Association of Independent Insurers, National Association of Mutual Insurance Companies, and State Farm Insurance Companies.) Following their inquiries, they pledged to explore mitigation and sustainable energy strategies. While these U.S. insurance groups began discussing the issue of climate change, an international coalition of major insurance and reinsurance companies was forming to address climate and environmental issues. Since late 1995, more than 81 companies from 25 countries have signed the United Nations Environmental Programme's
As the debate over global warming rages, actuaries may be able to play a greater role in evaluating the merits of the opposing views and contributing to climate research itself.
Since hurricanes Hugo and Andrew, insurance companies have had to fundamentally rethink pricing, underwriting and financing for catastrophic weather-related coverage. Insurers also have had to consider whether these events were just a harbinger of things to come. If these storms presaged a changing climate, what could insurers do to prepare themselves for future catastrophes and improve their assessment of future risks? At the Conference on Climate Change and the Insurance Industry in 1993. Frank Nutter, president of the Reinsurance Association of America, drew much attention in the insurance and environmental press. In 1995, Nutter joined officials from six other major U.S. insurance organizations to discuss climate-related threats with Vice President Gore and experts on climate change. (The other organizations included: Alliance of American Insurers, American Insurance Association, Institute for Business and Home Safety, National Association of Independent Insurers, National Association of Mutual Insurance Companies, and State Farm Insurance Companies.) Following their inquiries, they pledged to explore mitigation and sustainable energy strategies. While these U.S. insurance groups began discussing the issue of climate change, an international coalition of major insurance and reinsurance companies was forming to address climate and environmental issues. Since late 1995, more than 81 companies from 25 countries have signed the United Nations Environmental Programme's