Guest essay by Eric Worrall
Warren Buffett doesn’t understand the insurance industry; Or so suggests the Huffington Post, in a rather hysterical critique of Buffett’s lukewarm acceptance of climate dogma.
Buffett’s case against the resolution boils down to this: “Thinking only as a shareholder of a major insurer, climate change should not be on your list of worries.”
First, he said, his company can handle any possible losses thanks to rising premiums. Because insurance policies are typically written for one year and repriced annually, Buffett’s company can hike premiums to better account for the heightened risk of climate change-driven losses.
Second, Buffett asserts that climate change has produced neither “more frequent nor more costly hurricanes nor other weather-related events covered by insurance.”
But eight of the 10 costliest hurricanes in U.S. history, in terms of insured losses, have occurred since 2000, according to the Insurance Information Institute. Nine of the 10 costliest floods in U.S. history, when measured by payouts from the federal government’s National Flood Insurance Program, also have occurred since 2000, according to the insurance group.
He [Mark Carney, Governor of the Bank of England] also warned about potential losses from claims on policies written by insurers. For example, insurance companies could be forced to make massive payouts if victims of climate change successfully hold accountable companies that contributed to it. He likened the situation to the one faced by U.S. insurers stung by tens of billions of dollars in losses from asbestos claims.
In fact, Carney said that as a result of recent weather trends, some now estimate that insurers are undervaluing their potential losses by as much as 50 percent.
Insurance companies caught unprepared for the effects of climate change could cause problems for government officials and put taxpayers at risk.
Huffington Post is upset, because Buffett claimed that insurance losses have not increased to date due to climate change. It does not matter to the Huffington Post, that Buffett thinks climate change is a serious issue. It doesn’t matter that Buffett is a world renowned expert at correctly pricing insurance risk, and has repeatedly demonstrated that expertise, with a long track record of business success. What matters is that Buffett dared to contradict a tenet of the alarmist viewpoint; Buffett suggested that to date, there has not been an increase in extreme weather events, due to Climate Change. To true believers, this divergence from climate dogma is intolerable; in their minds, Buffett must be wrong.
When the evidence contradicts green dogma, climate alarmists discard the evidence.