Tag Archives: climate change

Climate Change Increased Weather-Related Catastrophes By Nearly Five Times In 30 Years, Munich Re Says

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Climate change increased the number of hurricanes, tornadoes and other weather-related catastrophes by nearly five times in North America during the past 30 years, according to research published Wednesday by the world’s largest reinsurer, Munich Re.

The German reinsurer said that “nowhere in the world is the rising number of natural catastrophes more evident than in North America.”

Insurance companies and reinsurers, which provide property coverage to insurers, have paid out between $10.4 billion and $110.8 billion annually to cover natural disasters worldwide between 2000 and 2009, according to the Insurance Information Institute, a trade group.

Separately, I wrote recently about the rising liability costs to insurers to pay lawyers in defending against climate-change related lawsuits, of which there have been more than 500 since 1989, according to a tally by a Columbia University law professor.

Between 1980 and 2011, the total insured property cost of weather-related catastrophes in the U.S. was $510 billion. About 30,000 people died as a result of storms during this period.

Munich Re, the parent company of Hartford Steam Boiler Inspection and Insurance Co., was careful to point out that the rising cost of storms and catastrophes is due to factors other than climate change.

“The increasing losses caused by weather related natural catastrophes have been primarily driven by socio-economic factors, such as population growth, urban sprawl and increasing wealth,” Munich Re said in a press release.

Here are some excerpts from Munich Re’s release:

  • The study was prepared in order to support underwriters and clients in North America, the world’s largest insurance and reinsurance market. Using its NatCatSERVICE — with more than 30,000 records the most comprehensive loss data base for natural catastrophes — Munich Re analyzes the frequency and loss trends of different perils from an insurance perspective. The North American continent is exposed to every type of hazardous weather peril — tropical cyclone, thunderstorm, winter storm, tornado, wildfire, drought and flood. One reason for this is that there is no mountain range running east to west that separates hot from cold air.
  • Nowhere in the world is the rising number of natural catastrophes more evident than in North America. The study shows a nearly quintupled number of weather-related loss events in North America for the past three decades, compared with an increase factor of 4 in Asia, 2.5 in Africa, 2 in Europe and 1.5 in South America. Anthropogenic climate change is believed to contribute to this trend, though it influences various perils in different ways. Climate change particularly affects formation of heat-waves, droughts, intense precipitation events, and in the long run most probably also tropical cyclone intensity.

Global Warming Brings Big Legal Expenses, Liability Questions For Insurers

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Arctic ice formed a natural sea wall that protected the barrier-reef of Kivalina, home to about 400 Inupiat Eskimos — until it thinned in recent years, and waves gulped at the shore, eroding the spit of land off Alaska’s northwestern shore and compelling residents to look elsewhere to live.

The Inupiat blame global warming and, more pointedly, in a federal lawsuit, energy companies that burn fossil fuel that they say contributed greenhouse gases warming the Earth.

The suit so far has been unsuccessful. Where it has succeeded, however, is in giving insurance lawyers a case study of an issue emerging as a major concern to property-casualty insurance companies and reinsurers, such as those in Hartford and Fairfield counties. Energy companies, air polluters and all manner of potentially responsible parties could be sued, and if they are, their liability insurer has an obligation to defend them.

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UConn Law Center Discusses Climate Change Risks And Liability

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The property-casualty industry has billions of dollars at stake each year when tornadoes, hurricanes, hailstorms and other disasters ravage homes and businesses.

But what about when a remote Alaskan village sues the energy industry, claiming that climate change has flooded the town? Are the insurers that provide coverage to the energy companies liable?

It’s actually two fundamental questions — can it be proven that climate change caused the village to flood, and, separately, if the energy companies are responsible, are insurers on the hook for damages?

These are some of the issues that will be discussed today (Friday) during a conference for insurance lawyers at the University of Connecticut School of Law’s Insurance Law Center.

One of the legal questions to determine if an insurer’s liability coverage covers an incident — including, potentially, climate change — is whether it was “an occurrence,” said Peter Kochenburger, executive director of the UConn Insurance Law Center.

“That’s not a user-friendly word, and the courts are all over the place on it,” Kochenburger said. “But said one way, ‘Is it an accident?’ Because if it’s not an accident, if there’s no fortuity, then, regardless of whether its property damage and there’s no exclusion, it’s not covered.”

The legal nuances abound. I will be reporting on the event later today. Featured speakers include:

  • Michael Gerrard, Director of the Center for Climate Change Law and Andrew Sabin Professor of Professional Practice, Columbia Law School.
  • John H. Fitzpatrick, Secretary General of The Geneva Association.
  • Anji Seth, Associate Professor, University of Connecticut Department of Geography