Climate Change is Risky for Insurance Companies

Ceres posted a joint press release with insurance company executives about the potential business costs of climate change for the industry (link). Losses from natural disasters caused by extreme weather events doubled in 2011, and projections from the InterGovernmental Panel on Climate Change fourth assessment (link) predict climate change is only going to continue or worsen this level of damage. This affects not just poor and vulnerable communities in developing countries—who are highly unlikely to be insured, anyway—but middle-class and wealthy communities in the US and other countries who do have private insurance. And that means not only increased premiums but also less favorable coverage and less competition in the marketplace. Thus, although we at Interfaith Power and Light emphasize issues of justice and stewardship with respect to climate change, the insurance risks illustrate once again that doing the right thing is also doing the prudent thing and ultimately the sustainable thing for ourselves, others, and the planet.