The Handsomest Fox In The Henhouse

Guest Post by Willis Eschenbach

Well, we had the Senate hearing on the climate. Dr. Roy Spencer and Dr. Roger Pielke gave excellent talks. There’s a discussion of it here on WUWT  and Dr. Judith Curry has a post on it at her blog.

I wanted to discuss the silver fox in the science house, the testimony of Mr. Frank Nutter, Esq. He represented the insurance and reinsurance industries, and presented their recommendations with an insurance company’s usual honesty and plain square dealing, combined with a lawyer’s well-known transparency and clarity.

Mr. Nutter’s bio from when he was a Moderator for an AGU conference includes …

Mr. Nutter currently serves on the Board of the International Hurricane Research Center … He recently served on the Council of the American Meteorological Society; the Board of the University Center for Atmospheric Research, a consortium of universities managing the National Center for Atmospheric Research sponsored by the National Science Foundation; and the Board of the Bermuda Institute for Ocean Sciences.

When I read that, I thought dang, they got an insurance guy who is actually a climate scientist? That’s a surprise. So I wondered, what are his qualifications for being on all of those climate-related boards?

Well … it turns out he has a law degree, which his bio spells out in full, a “Juris Doctorate”. And he has a winning smile. And presumably lots of money.

In any case, Mr. Nutter Esq. put a bunch of insurance company recommendations before the good Congresspersonages, and I busted out laughing when I read the first one.

Congressional Action

As Congress considers the impact of climate change, the RAA [Reinsurance Association of America] suggests the following legislative principles or actions to consider:

• Provide tax credits to individuals for specified mitigation and resiliency actions associated with extreme weather and climate change.

Now, what’s not to like in that? He’s interested in adaptation to evil CO2, and not in a carbon tax to mitigate CO2. He wants to upgrade our infrastructure to make America less vulnerable to the oft-rumored climate catastrophe, strengthen our resiliency and ability to weather the oft-foretold and oft-delayed climate catastrophe, or even just do a better job of surviving the next big storm … you almost want to congratulate him for his community spirit.

Almost …

Here’s the deal with insurance companies. They are in business to make money, and more power to them—insurance is a needed and useful service, and if they can’t make a profit everyone suffers. However, we need to keep in mind a few very important things.

The first one is that the more that people are scared of the future, the more insurance they will buy. So as you might imagine, the insurance companies have been the allies of climate alarmists from day one. Munich Re has been strongly pro-alarm since the early days. So has Swiss Re, and so has every insurer with half a brain. Climate alarmism is the insurer’s perfect storm, people will have to insure against all the foretold dooms—they have to protect themselves from flood, fire, famine, drought, sea level, storms, insect-borne diseases, and all of the thermally-induced biblical curses that were supposed to appear a decade ago. (We’re earnestly assured their appearance has only been postponed, not cancelled, so I guess there’s still hope for the rain of frogs.) Every time James Hansen or another of the terminally alarmist folks talks up the future climate terrors, the insurance industry applauds them all the way to the bank.

The second one is that like any business, insurers want to increase their income and cut their costs, or in other words, increase their profits. The best, of course, is if they can increase their incomes with no increase in costs or overheads. Then it’s all profit, of which more anon.

The third is that, despite all of Mr. Nutter’s hype and his charts, there is no evidence that  extreme weather events are increasing. Even the IPCC has been dragged kicking and screaming to admit this. The land has been warming for a couple hundred years, but nowhere in there are any thermal catastrophes, or any increase in the extremes of wind, water, and weather.

Now with those three things in mind, let’s look at the insurers’ first prescription for the Congressfolk. They want tax credits for people to strengthen their houses … and that means that when the next inevitable weather calamity hits, Mr. Nutter, Esq. and his merry men will make even more money. Fewer claims for loss means more money in the bank.

I mean, that is a work of genius—in the name of green caution, convince Congress to give special tax breaks to a subsection of all taxpayers, that is to say homeowners. But not just any homeowners, a special subclass of homeowners, those who get their roofs blown off and such. They are a special subclass because they’re the ones costing the insurance companies money. So we give those folks tax breaks for strengthening their buildings. As a result, tax revenues go down, a small percentage of the taxpayers get a special tax break, the poor get nothing, and the insurance companies’ revenues go up … and this is supposed to be a good thing? The brilliant arrogance of the plan is stunning.

If nothing else, you gotta admire the gall of the thief proposing that we pay him to rob people … not that the insurers need the money, they’ve already made billions off of the climate scam, and they’ll make billions more before the lunacy has run its course.

Of course, once the houses are strengthened, I assume most folks reading this know enough not to expect the insurance rates to drop—after all, James Hansen has assured the insurers that a major calamity is inevitable, Thermageddon is just around the corner. So the insurers can’t possibly reduce their rates, that wouldn’t be fiscally responsible in the face of grave imaginary danger …

So the rates will remain the same, or even go up to match the prophesied thermal meltdown, and the losses will go down, and the insurers will make more money on both ends.

Remind me again why this lucre-driven jackanapes has been invited to speak on the same platform with climate scientists? Mr. Nutter may be an excellent lawyer, but in front of Congress with his insurance hat on he is just a wallet with a mouth, crying “Feed me! Feed me!”.

Now that you understand how the game is played, lets look at the other insurance company proposals, and I’ll translate them one by one, although you could likely do it yourselves. I will list their points in bold type, verbatim.

• Incent communities to develop and implement mitigation and resiliency initiatives.

English is such a great language. We’re going to “incent” communities to implement initiatives that will reduce the costs to the insurance companies. How to “incent” them is not specified, but I assume it involves “incenting” them with taxpayers money.

I don’t have to assume it will increase the insurers’ profits, however, that’s a given. Any “mitigation and resiliency initiatives” will put money directly into the insurers’ Swiss bank accounts. That’s the pure gravy I mentioned above. No additional expenses. No associated costs. No increases in overheads. Just a pure reduction in claims for loss, and that’s 100% profit.

• Reform the National Flood Insurance Program to reflect extreme weather and climate risk in its rates.

In other words, reducing the insurers costs from claims for loss is not enough—the insurance companies also want to be able to increase the rates at the same time. Note that the clever Mr. Nutter doesn’t mention the word “increase”, as in “increase the rates”. After all, “increase” is such an ugly term, don’t you think? No, they merely want to “reflect extreme weather and climate risk” by appropriately embiggening the premiums required under the Program, but they are not increasing the rates, oh, no, don’t say that.

Never mind that there is no evidence of an increase in extreme weather, despite 200 years of warming. Never mind that “climate risk” is undefined as befits its ethereal nature. They want to be able to increase the rates, so truth is not on the list of necessary ingredients.

• Apply Federal standards to state/local building codes and incorporate climate and extreme weather risk into these standards.

This is the same as their first proposal, just another way to get the buildings stronger to reduce the insurance companies’ costs. It will not be matched with a commensurate reduction in rates, so it is pure profit to the industry. Money for jam, as they say.

Next, “climate and extreme weather risk” are already in the standards. The standards involve engineers, not insurance lawyers. Do they think extreme wind and weather are not considered by every structural engineer?

Let me note one other profit stream for the insurance industries. Every time any standard is increased, whether for real or for imagined risks, the costs (and thus the value) of the building go up. And from the moment that construction starts until it is demolished, the building is insured. Finally, the premium paid to the insurers is some percentage of the insured value … I’m sure you can do the math.

• Purchase or relocate properties near coastal or river areas at repeat risk.

This one translates as “we’re tired of being forced to insure losers, so the US Government should buy them out using taxpayers’ money.”

Why doesn’t the Government ever do things like that for me? I mean, why don’t they solve some big business problem that is costing me money? And more to the point, if people insist on building on flood plains and barrier islands and below sea level, why should you and I or the US Government have to pay for their foolishness?

• Use nature to mitigate risk before and after extreme events.

Noble, green, and low-cost, nature is just the ticket … plus it puts money in the insurers’ pockets. Gotta love nature.

I could go on, but I’m sure you get the point. Once you look past the coat after coat of green paint on this pile of most cleverly worded proposals, it is nothing but a greed-driven, highly disguised push to have Congress do the insurers’ dirty work, and to have the taxpayers pay for it.

In my opinion, the insurance companies do not belong on the same dais with the scientists. Mr. Nutter’s proposed actions, one and all, increase the profits of the insurers. If we implemented all of his ideas they’d make billions more than otherwise. If scientists need to declare their conflicts of interest, then it should be noted that the insurance companies make more money out of climate alarmism than  James Hansen ever made, even with his salary, his pension, and his awards. Not to mention the generous gifts he accepted … but all of that pales before money made by the insurers. They started stoking the climate hysteria early and often, and have kept pushing the hype right up to the present. And during that time, they have made billions out of the madness of crowds, they are looking to jack their profits even more … and someone thinks we should listen to a single word they say on the subject?

I mean, think about it. The insurance companies have it made. They have hordes of otherwise reasonable people who have drunk the koolaid and go around spouting doomsday prophecies about the Thermal End Times, and about simultaneous droughts and floods, and about meters and meter of sea level rise … it’s an insurer’s wet dream to have suckers of all stripes sounding every alarm bell like that, it’s golden.

Because to an insurance company, alarm bells and frightened people are money in the bank.

So no, they should not get a say at the highest levels. They should not get a special hearing in front of Congress. We know what they will say, duh, no mystery there. They will say that the taxpayers should pay for repairs and changes and mitigations that will make the insurers more money. In a way I don’t blame them for saying that, although I don’t like the deception, it’s a businesses’ job to sell their product.

But I do blame anyone who pays the slightest attention to Munich Re and Swiss Re and Frank Nutter and the rest of the insurance folks on the subject of climate. They are not your friends. Their advice is 100% self-serving. Their proposed benefits are measured in dollars, and not your dollars—dollars in their Swiss bank accounts.

Global warming supporters say that the science is all on their side … so who did the global warming folks send to plead their case to Congress?

An insurance company lawyer who says “fill our pockets with money, suckers, it’s all ever so green, and oh, you’re picking up the tab for lunch” …

I must say, however, that if Heidi Cullen and Frank Nutter are part of the global warming supporters “A-Team”, that we skeptical folk must be winning. That’s a pretty pathetic lineup.

w.