Insurance underwriters generally operate in the real world, where science trumps ideology (that's why terrorism insurance is pretty darned cheap — despite the politically successful posturing of our leaders, terrorism just isn't a very big threat). That's why climate change insurance costs big bucks — insurers know that it's real, it's coming, and it's really, really bad news.

The difference between the general Big Business propaganda intended to sow doubt about climate science and the cold, hard economic reality of underwriting the risk of climate catastrophe is telling. It's like the Texas Young Earth Creationists who profess a public belief in the 5,000-year-old Biblically accurate planet, but still allow their geoscientists to direct oil-drilling operations in accord with the blasphemous four-billion-year-old Earth. Money talks, bullshit walks.

And the industry expects the situation will get worse. "Numerous studies assume a rise in summer drought periods in North America in the future and an increasing probability of severe cyclones relatively far north along the U.S. East Coast in the long term," said Peter Höppe, who heads Geo Risks Research at the reinsurance giant Munich Re. "The rise in sea level caused by climate change will further increase the risk of storm surge." Most insurers, including the reinsurance companies that bear much of the ultimate risk in the industry, have little time for the arguments heard in some right-wing circles that climate change isn't happening, and are quite comfortable with the scientific consensus that burning fossil fuels is the main culprit of global warming. "Insurance is heavily dependent on scientific thought," Frank Nutter, president of the Reinsurance Association of America, told me last week. "It is not as amenable to politicized scientific thought." Yet when I asked Mr. Nutter what the American insurance industry was doing to combat global warming, his answer was surprising: nothing much. "The industry has really not been engaged in advocacy related to carbon taxes or proposals addressing carbon," he said. While some big European reinsurers like Munich Re and Swiss Re support efforts to reduce CO2 emissions, "in the United States the household names really have not engaged at all." Instead, the focus of insurers' advocacy efforts is zoning rules and disaster mitigation.



For Insurers, No Doubts on Climate Change [Eduardo Porter/New York Times]

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