Guest opinion: Dr. Tim Ball
“An ounce of prevention is worth a pound of cure.” – Benjamin Franklin
The claims of increasing disasters presented as inevitable by the Intergovernmental Panel on Climate Change (IPCC) provided opportunities for government interference and crony capitalism on a massive scale. Their actions ignored the realities and enabled unwise behavior by offering assistance and compensation if problems developed in areas where problems are well-known and inevitable.
The insurance industry is a major benefactor of this crony capitalism. They promoted the false IPCC claims on their web pages, sponsored documentaries, and did everything to exaggerate the threat. Look at the comments from the web page of Swiss Re.
Re/insurance plays an important role in managing climate and natural disaster risk, and that’s why it’s part of Swiss Re’s core business.
Managing climate and disaster risk is part of Swiss Re’s DNA.
Munich Re is a little more circumspect, but the basic acceptance of the IPCC mantra is the same.
In order to develop scientific scenarios showing the long-term impacts from climate change, the potential paths for the development of greenhouse gas concentrations in the atmosphere need to be fed into the climate models. In this context, the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) – published in 2013 and 2014 – defines the Representative Concentration Pathways (RCP), which also indicate the extent to which radiated energy per area and time (radiative forcing) will have increased due to anthropogenic factors by the end of the 21st century compared to the pre-industrial period.
Together, our mission and vision define the framework of our climate strategy. This makes clear our resolve to address climate change both in the short term and in the long term.
What is the meaning of the “Re” integrated into so many of these names? It is an abbreviation of the word reinsurance, and in most cases was attached to the name of the existing parent insurance company.
After Hurricane Andrew, many small insurance companies were unable to cover their insurance commitments. They lacked the resources to deal with all the claims. It triggered the creation of dozens of companies that insured the insurers, hence the term reinsurance. However, a few major ones dominated the industry and were based in Bermuda.
“More than a third of the world’s top 50 reinsurers are based in Bermuda or have a major operation here.”
A few years ago a former student who manages a large investment portfolio was investigating buying shares in one or two of these companies. I flew with him to Bermuda to talk with five of the major reinsurance companies. My contribution was to determine what sources they used to determine natural disasters in general but weather disasters, including tornadoes and hurricanes, in particular.
The companies were licenses to print money mostly managed by former employees of Lloyds of London who lost their jobs when the company had serious problems in the early 1980s. They were welcomed by Bermuda because they put billions in Bermudian banks. They were an excellent investment because of few employees, low overheads, and large cash assets.
Nobody I spoke with had any training or even a rudimentary understanding of severe weather. None of them consulted with any experts or even knew of hurricane forecasters such as the late William Gray when they calculated the risk factors and the insurance rates. This despite the claims on Munich Re’s web page. Finally, I asked one how he determined the rates. He replied, whatever the market will bear.
There are times and places for insurance, but on a wider perspective, they encourage irresponsible and even dangerous behavior. It becomes an enabler. As part of chairing the Assiniboine River Management Assessment Board (ARMAB) to create a management strategy for a large drainage basin, I established the need to look at crop and flood insurance. How much responsibility should the owner of property have about natural risks? Unfortunately, nowadays, if people live in high-risk areas they expect other people, through the government and insurance to save them and compensate them if something happens.
If you choose to live in areas such as “tornado alley” (Look at the chart of deadliest tornadoes and date of occurrence), the hurricane regions of the US southeast, high earthquake risk zones of the west coast, or even the bitterly cold and blizzard-prone regions of the north-central US, it must be with knowledge of the risks and liabilities. You can’t live in the flood plain of a river and not expect floods; its name means something. Despite that people live there and expect sympathy and help when it floods. The spirit and compassion of most people are that they step up to help, but shouldn’t we look at reducing the risk by limiting settlement in such regions?
One of the things I learned flying search and rescue across central and Arctic Canada is that most people get into trouble in dangerous areas by ignoring or downplaying the dangers. Several of my colleagues died in crashes while taking risks searching for these people. I tended to develop the view that I am my brother’s keeper, but I am not, nor should I be expected to be, my stupid brother’s keeper. We could begin by making all primary floodplain regions parks. There are few reasons for any occupation in these regions.
Think of benefits with the lives and trillions of dollars saved, not to mention curtailing exploiters of crony capitalism. The negative impacts and unnecessary costs to society created by the IPCC’s doctored findings are so pervasive that it is almost impossible to do a reasonable cost assessment. We can add to the list of assessments the fact that governments, industry, and people are preparing for global warming when the risks from global cooling are much higher.
The World Meteorological Organization (WMO) of which the IPCC is a subset, knows this because they carried out studies on the impact of cooling during the cooling spell from 1940 to 1980. It is a good job we didn’t act then. It is also reason for not acting now and only dealing realistically with long term conditions in generally defined areas of natural disasters. This must include exposing the fallacies of the IPCC Reports and stopping governments and insurance companies from enabling risk taking.