Not long ago insurers operated on simple rules-of-thumb—like 100-year mega-fires, 100-year mega-floods, 100-year droughts, and all kinds of “100-year” rules-of-thumb—to explain climate disasters that happened infrequently, often generations apart. Rules-of-thumb that seemed to work. Or so they thought.
But today, it seems 100-year climate disasters have begun hitting the news media every 100 days. And the frequency continues accelerating: Meteorologists are now reporting powerful once-in-a-1,000-year “biblical” disasters increasing in frequency as costs keep skyrocketing.
USA Today headlines capture the accelerating trends: “1,000-Year Storm Slams S.C.” Then the next day it was: “Biblical flooding becoming more common.” Yes, climate disasters are now more frequent, more costly and as a result better long-term investments than Big Oil and fossil fuels.
Next this report; “Biblical flooding in South Carolina is at least the sixth so-called 1-in-1,000 year rain event in the U.S. since 2010, a trend that may be linked to factors ranging from the natural, such as a strong El Niño, to the manmade, namely climate change,” according to the National Oceanic and Atmospheric Administration (NOAA).
6 ‘Once-In-1,000-Yrs’ Biblical Disasters Hit World In 6 Years
Worse, looking back over breaking news from the past decade tells an even bigger global story of disasters … remember the Arizona megafires, killed 19 firefighters … the recent megafires sweeping Oregon, Washington … Oklahoma tornadoes … earlier Jersey Shore’s Superstorm Sandy … the Yosemite Rim Fire … out of control Colorado flooding… hurricanes in Mexico … Africa floods … Japan’s typhoons … India’s monsoons … China’s earthquakes … California Central Valley farm economy ground water disappearing. Yes, climate-disaster news is relentless, increasing, accelerating, we tune it out to keep our sanity, for now.
Disaster after disaster, costing billions on top of billions. Yes, our world is being hit with an accelerating barrage of bigger, more powerful, costlier natural disasters. Yet in a parallel fantasy universe Big Oil, conservative billionaires and their GOP lobbyists remain with their heads in the sands, trapped in their predictable irrational denial of the increasing negative impact of climate change.
Worldwide, the insurance industry is waking up the public, creating a new paradigm shift. Until now, climate-science-denying capitalists, Big Oil, Koch billionaires and the entire fossil-fuel industry all assumed the American taxpayer will just keep picking up the tab forever … that climate change is not manmade … assumed Americans are the insurer-of-last-resort … that climate disasters are really ‘Acts of God’—His fault—so the public had to foot the bill, self-insure.
Warning, folks, that’s all changing: Insurers are capitalists. They’re in business to make a profit, same as Exxon and the Koch Bros. Insurers are no longer relying on 19th century rules of thumb and outdated formulas. Nor can they let the myopic rhetoric of today’s science deniers, whether Congress, fossil fuel giants or GOP state governors set insurance rates and policies. Things are changing with new insurance industry players on the offensive.
Science Replaces Outdated ‘Once In 100-Years’ Rules-of-Thumb
With today’s new high-tech world, science-driven, big-data capitalism rules, insurers can no longer make money using outdated, seat-of-the-pants, hand-me-down 100-year and 1,000-year disaster reoccurrence formulas that no longer reflect the reality of our 21st century’s accelerating trends where everything’s happening at hyper speed, tweets, trades, travel and now climate traumas. For we now know, so-called “100-year disasters” are too often hitting every 100 days, and so-called “1,000-year biblical disasters” can repeat annually.
So climate science deniers can babble on all they want—Big Oil, Koch Bros, Chamber of Commerce, and their GOP lobbyists—can rant and rave all they want about their myopic ideologies, unprincipled obstructionism, underlying greed, and tout their so-called anti-scientific research. They can pay off academicians to write articles and make speeches to cast doubt on legitimate climate science. And they can buy all the national ads they want to degrade climate activists like Michael Bloomberg, Hank Paulson, Tom Steyer and their RiskyBusiness.org, Greenpeace and Bill McKibben’s 350.org global army of environmental activists.
But soon, all the science-deniers’ noise may not matter much. Profit-minded insurance industry capitalists are wising up. They know the Age of Big Oil has peaked, the fossil fuel industry is dying. So new climate warming legislation may even be needed … no grand bipartisan political bargain may be necessary … nor any long, drawn-out, costly lobbying efforts called for … no new worldwide campaigns to support alternative energy innovations … indeed, even the UN Paris Agreement will be irrelevant on a dying planet.
Why? In the future, the increased frequency, intensity will be so obvious, the scientific data so overwhelming, that insurance costs will finally have to be based not on mythic rules-of-thumb but on hard evidence, climate-science statistics pushed are the real culprits.
6 Global Warming Mega-Trends Transform Insurance Industry
The Geneva Association for the Study of Insurance Economics, a global think tank, published a report that pinpoints a new direction for climate-change insurers: “Warming of the Oceans And Implications for the (Re)insurance Industry.” Formed in the 1970s, the Geneva Association is now the industry’s leading global insurance think tank for “strategically important insurance and risk-management issues.”
The Geneva Association is a recognized spokesman for the world’s most powerful insurance groups. Membership is made up of 90 CEOs from the world’s top insurance and reinsurance companies, operating worldwide through a network of industry power players. They develop strategies for risk management in today’s uncertain global economy. Their “annual General Assembly is the most prestigious gathering of leading insurance CEOs worldwide.”
Recently the association identified the world’s six biggest trends that are having the greatest impact on the future of climate change and insurers. They warn that climate and global-warming problems are bad, getting worse. Keep in mind that the Geneva Association for the Study of Insurance Economics is not an organization of left-wing activists but hard-nosed profit-motivated capitalists. And their six megatrends are based on the same hard scientific evidence that climate-science deniers are categorically dismissing. Here’s a summary of the Geneva Association report on the six megatrends:
GLOBAL WARMING IS ACCELERATING, WILL SOON BE IRREVERSIBLE
“New scientific evidence that the world’s oceans … warmed significantly … ocean energy is the primary cause of extreme climate events … increasing the number of insurance-relevant hazards … a near irreversible shift … even if greenhouse gas emissions stopped, ocean temperatures would keep rising.”
RISK ANALYSIS, SCIENTIFIC DATA REPLACES OLD RULES-OF-THUMB
Geneva’s report is quite clear, “traditional approaches based solely on analyzing historical data no longer work in making risk assessments today … A paradigm shift from historic to predictive risk assessment methods is necessary” using new “scenario-based approaches and tail risk modeling.” Science facts are replacing climate-denier capitalist ideologies.
CLIMATE CHANGE HAS BIG NEGATIVE IMPACT ON WORLD ECONOMY
Warning, “in some high-risk areas, ocean warming and climate change threaten the insurability of catastrophic risk more generally.” A separate Scientific American research study estimates the cost to global economies at $60 trillion. The Guardian newspaper of London called it an “economic time bomb” that will “undermine the global financial system” of a world whose total GDP is only $75 trillion.
EXTREME WEATHER WORLDWIDE: ‘DRIER DRIES’ & WETTER WETS’
“Thermal expansion of the oceans … melting of continental ice shelves and glaciers has increased global sea levels … the rate is accelerating … rising sea levels increase the risk of flooding … storm surges … decreasing the protective life span of coastal infrastructures such as Dutch flood dikes or the Thames barrier … Sea level rise also increases the damage potential from geophysical events.”
UNPREDICTABLE UNKNOWNS TRIGGER BIGGER CLIMATE CATASTROPHES“
Warming of the oceans … affecting … large-scale climate patterns … However, due to the long time scales of ocean dynamics … and the relatively short length of observational data … the effects of those changes on catastrophic risk … are unclear.
Smart money’s betting on climate change: McKibben wrote in Foreign Policy that it “might already be too late.” Today, the smart money is betting on the re-insurance industry’s shifting paradigm: For too long Big Oil and climate-science deniers have been shifting the burden of their short-term profit strategies to the public. But the new scientific data from the re-insurance industry is changing all that. The plus side reveals new opportunities for investors—buy insurers, sell fossil fuels.