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Insurance companies not seeing effects from posited 'climate change' spawned weather disasters
57 Comments
September 29, 2014 9:16 am
The lack of disasters will drive down premiums. In a year or two there will be a natural disaster – maybe weather related. This will lead to losses and the claims of a worsening situation. By then the premiums will go up and (barring another major disaster quickly after) so will profits. And so the cycle at Lloyds repeats, as it has done for over 300 years.
September 29, 2014 10:44 am
My husband is an independent insurance adjuster in the US. He has not had much work this year. Lots of adjusters are having to get out of the business so they can have some type of income. Contrary to popular opinion insurance adjusters many times make their money based on the size of the payout of the claim. So, a the more money they can get for the insured without violating the boundaries of their insurance policy the more money the adjuster can make. The claims adjuster is usually on policy holders side. Of course there are some bad apples out there. Knowing that Buffett is making a ton of money off hurricane premiums will make be feel much better when my husband works claims from the next hurricane and finds tens of thousands of dollars in damages that have to be covered by the insurance companies. But for now, I know a bunch of adjusters who would love for a little bit of climate mayhem (of course we don’t want people to be hurt) so they can go to work but we all know it is a cyclical business and try to plan finances accordingly.
September 29, 2014 3:33 pm
Insurance actuaries know full well that the number of catastrophic losses has not been increasing, because the statistics are clear. What has been increasing is the average loss per incident, simply because there are more structures/objects/lives in the path of a typical catastrophe. Hyping climate change is one way you could mitigate the typical insurance cycle (ie disaster strikes, premiums rise….no disaster, premiums fall then losses follow wit hthe next disaster. Rinse, repeat) as a reinsurer by inflating premiums over the entire period. To be truly effective it would need the bigger players in the industry to all hold a similar view….
Whether you will see this in print from an insurer will depend on what their angle is. Having met with the Lloyd’s risk people I know that their view for many years has been that climate change is a significant risk, and their publications reflect that belief.
Note that Lloyd’s is not an insurer, but an insurance market (ie the Lloyd’s market brings other insurers together in syndicates to insure large/unusual risks).
September 30, 2014 9:35 am
Not sure who to believe…
Undated article from Swiss Re:
Spiegel said that weather-related losses were rising. “They amount to 40 billion USD at the moment,” he said. “Weather-related insured losses are rising and the intensity of weather-related events such as hurricanes is going up as well. We are integrating these risks in our pricing.”
September 30, 2014 10:48 am
Very interesting, good news as I fired Intact insurance agency for climate alarmism.
(They softened a bit in later communications － ｓａｙｉｎｇ ｔｈｅ ｉｎｄｕｓｔｒｙ ｈａｄ ｌａｒｇｅ ｌｏｓｓｅｓ, but were also whining about earthquake risk – hey! the risk of earthquakes on the west coast of North America has not changed significantly. (Slowly rising in areas that have not had a big one in centuries.)
Problem is that insurers, re-insurers and pools or whatever Lloyds is get complacent, they lower rates to get more business but the nature of insurance is they have to be able to cover large disasters like Super Storm Sandy.
Intact was so dumb as to offer out-of-Canada travel insurance for a low price with no restrictions on duration of trip. Just the thing snowbirds want – some stay the winter in AZ. Intact must have lost its shirt because they raised the price every year to roughly four times the original price.
Lack of major disasters gets Lloyd’s of London back in profit –
WUWT reader “jimbo” writes in Tips and Notes: We often hear how climate disasters / extreme weather events are getting worse. We know there is no evidence and sometimes the opposite is seen. Now let’s look at the insurance industry. Surely they could tell us that things are indeed getting worse than we thought!
Surely Warren Buffett has an eye for increasing premiums in the face of extreme weather events?
What about Lloyd’s of London?