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Thread: World's largest economic sector faces global warming as a reality

  1. #1

    World's largest economic sector faces global warming as a reality

    Abstracted from an op-ed in yesterday's Washington Post by John Morrison and Alex Sink, state overseers of insurance companies in Montana and Florida, respectively.

    If you don't want to read the whole abstract, skip to the final paragraph below the bracketed quote. I didn’t realize that insurance is the world’s largest economic sector.
    Montana is burning again. Wildfires have increased fourfold since the 1980s, and they are bigger and harder to contain because of earlier-arriving springs and hotter, bone-dry summers. Insurance companies continue to pay out billions for wildfire losses across the West. Meanwhile, Florida is bracing for the duration of the hurricane season even as rebuilding continues. Since the 1970s, the number of storms intensifying to Category 4 or 5 hurricanes has almost doubled, costing insurers tens of billions of dollars.

    Increasingly destructive weather--including heat waves, hurricanes, typhoons, tornadoes, floods, wildfires, hailstorms and drought--accounted for 88% of all property losses paid by insurers from 1980 through 2005. Seven of the ten most expensive catastrophes for the U.S. property and casualty industry happened between 2001 and 2005. [Surely one of those was 9/11. – F.R.]

    Ten years ago, Peter Levene, chairman of Lloyds of London, was skeptical about global warming theories, but no longer. "At Lloyds, we feel the effects of extreme weather more than most," he said. "We don't just live with risk--we have to pick up the pieces afterwards.” Lloyds predicts that the U.S. will be hit by a hurricane causing $100 billion worth of damage, more than double that of Katrina, and industry analysts estimate that this could bankrupt forty insurance companies.

    Lloyds has warned, "The insurance industry must start actively adjusting in response to greenhouse gas trends if it is to survive." The Association of British Insurers has called on governments to "stem ominous weather-related trends" by cutting carbon emissions. AIG, America's largest insurer, and Marsh, its largest broker, have joined with other corporate leaders to urge Congress to reduce U.S. greenhouse gas emissions by 60-80% by mid-century. European insurance giants Swiss Re, Munich Re and Allianz issued similar statements. A.M. Best, the historical voice of the industry, began a series in the August edition of Best's Reviews on the risks, regulatory issues and economic impact of climate change.

    Nervous investors have begun asking insurers to disclose their strategies for dealing with global warming. Andrew Logan, insurance director of the Ceres investor coalition, representing $4 trillion in market capital, warned that "insurance as we know it is threatened by a perfect storm of rising weather losses, rising global temperatures and more Americans living in harm's way." Ceres cites estimates that losses related to catastrophic weather have increased more than 15-fold in the U.S. property casualty industry in the past three decades.

    Some insurance companies have reacted by simply abandoning catastrophe-prone markets or jacking up rates. Others have taken steps in the battle against climate change by offering premium incentives for "green" construction and hybrid cars, investing their massive capital in companies that cut carbon emissions or develop clean energy, and offering pay-per-mile car insurance. Others are moving to protect carbon-consuming forests.

    Insurance companies make money by accurately assessing risk. For decades environmentalists have been sounding the alarm about global warming. Now major insurers are becoming engaged as they look after their own assets and those they insure.
    ”Federal reluctance to commit to international agreements on climate change, or otherwise cap total carbon emissions, appears to be driven by influential businesses that fear the limitations will hurt their bottom lines. But the risk perceived by the insurance industry--the world's largest economic sector--may shift that political balance. At the least, it should tell us something.”

  2. #2
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    If we stopped everything right now, it would be hundreds of years before there would be any effects in the global warming trends. If humans all went back to the horse and buggies, no fires, no nothing, it would be hundreds of years before there'd be any changes in global warming.

    Baron Max

  3. #3
    Quote Originally Posted by Baron Max View Post
    If we stopped everything right now, it would be hundreds of years before there would be any effects in the global warming trends. If humans all went back to the horse and buggies, no fires, no nothing, it would be hundreds of years before there'd be any changes in global warming.
    Interesting. What's your source for that?

  4. #4
    Valued Senior Member desi's Avatar
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    What are they basing this off of? The Katrina debacle was due to people living where everyone with any sense knew flooding would happen sooner or later. Fear mongers get annoying when you know better. I don't mind business taking profits but scaring up business is just bad business.

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    Quote Originally Posted by desi View Post
    What are they basing this off of? The Katrina debacle was due to people living where everyone with any sense knew flooding would happen sooner or later. Fear mongers get annoying when you know better. I don't mind business taking profits but scaring up business is just bad business.
    You're being FAR to narrow-minded. Katrina was actualy just a small part of the total losses that occured in that 25-year span between 1980 and 2005. You have to look at the WHOLE picture - not just one little piece of it. And I really doubt if you have any idea about the magnitude of things in Florida or all the wildfires just in recent years alone.

    There's no fear-mongering here! Insurance companies, like anything else, are in business to make money. And when they begin to stop writing coverage - as many have done - that's NOT to scare anyone, it's called doing business.

  6. #6
    Quote Originally Posted by desi View Post
    What are they basing this off of? The Katrina debacle was due to people living where everyone with any sense knew flooding would happen sooner or later.
    Not entirely. The Army Corps of Engineers is one of the most respected institutions in America. People automatically have faith in anything they build. The reason they collapsed is that they were never meant to last this long without being reinforced or replaced. It's the same thing that's going on with our bridges: There's nothing wrong with the way they were built, they are simply overdue for normal maintenance or replacement. The government is so paralyzed by war, bureaucracy and corporate favoritism that it no longer does even the basic jobs that everyone assumed was the bare minimum it would always do.

    Nonetheless the point is well taken that hurricanes are becoming larger and more frequent because of the way climate change affects the open ocean. It would be easy for a hurricane to do just as much damage in Florida or Texas. As the globe warms and hurricanes roam further north, one could easily hit us here in low-lying Washington or even New York, which is nothing but a chain of islands. There is absolutely no reason they couldn't become more common in the Pacific and start hitting L.A. and San Diego... not to mention all those ripe little islands that make up Indonesia, Malaysia and the Philippines.
    Fear mongers get annoying when you know better. I don't mind business taking profits but scaring up business is just bad business.
    They are not scaring up business. I worked for an insurance company and I assure you, there is no industry on earth that is more coldly rational. That is why I posted this in the first place. If the insurance industry is starting to take global warming seriously , it is time to worry.

  7. #7
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    Quote Originally Posted by Fraggle Rocker View Post
    I worked for an insurance company and I assure you, there is no industry on earth that is more coldly rational. That is why I posted this in the first place. If the insurance industry is starting to take global warming seriously , it is time to worry.
    Precisely the point I was trying to get across to Desi.

    When the cold, calculating insurance companies STOP writing policies (their primary source of income for operations and investments) one can be assured they aren't trying to "scare up" business. Just the opposite, in fact - they are turning it DOWN because the risks have become too great!!

  8. #8
    Quote Originally Posted by Baron Max View Post
    If we stopped everything right now, it would be hundreds of years before there would be any effects in the global warming trends. If humans all went back to the horse and buggies, no fires, no nothing, it would be hundreds of years before there'd be any changes in global warming.

    Baron Max
    If we would all have horses and buggies global warming would still speed up. Horses fart and belch.

  9. #9
    Mourning in America madanthonywayne's Avatar
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    I find it ironic that enviromentalists are making so much hay from hurricane Katrina when the whole situation was caused by them. A flood gate was all set to be built in the seventies which would have prevented the flood. Until some enviromentalists came along and filed a lawsuit which stopped its construction.

  10. #10
    Quote Originally Posted by madanthonywayne View Post
    I find it ironic that enviromentalists are making so much hay from hurricane Katrina when the whole situation was caused by them.
    What kind of hay are the environmentalists making then? I can't remember seeing the environmentalists trying to gain profit from the hurricane.

    How did the environmentalists cause the hurricane to happen? Did they pray to the hurricane gods?

    Or did you mean that they objected to a project that would destroy vast tracts of the environment, and the greedy policy makes were uninterested in proposing a solution that didn't destroy the environment to this degree? Who is to blame? Environmentalists for trying to save our natural heritage, or policy makes too cheap to come up with a good solution?

    I think you have been blinded here by your own political agenda.

    Or may I propose another theory giving us another party to blame? Are we seeing a chaos theory effect here? was it not a butterfly flapping its wings in China that set Katrina off, but was it a wet fart by George W Bush on his ranch during one of his many long holidays?

  11. #11
    Valued Senior Member desi's Avatar
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    Quote Originally Posted by Fraggle Rocker View Post
    Not entirely. The Army Corps of Engineers is one of the most respected institutions in America. People automatically have faith in anything they build. The reason they collapsed is that they were never meant to last this long without being reinforced or replaced. It's the same thing that's going on with our bridges: There's nothing wrong with the way they were built, they are simply overdue for normal maintenance or replacement. The government is so paralyzed by war, bureaucracy and corporate favoritism that it no longer does even the basic jobs that everyone assumed was the bare minimum it would always do.

    Nonetheless the point is well taken that hurricanes are becoming larger and more frequent because of the way climate change affects the open ocean. It would be easy for a hurricane to do just as much damage in Florida or Texas. As the globe warms and hurricanes roam further north, one could easily hit us here in low-lying Washington or even New York, which is nothing but a chain of islands. There is absolutely no reason they couldn't become more common in the Pacific and start hitting L.A. and San Diego... not to mention all those ripe little islands that make up Indonesia, Malaysia and the Philippines.They are not scaring up business. I worked for an insurance company and I assure you, there is no industry on earth that is more coldly rational. That is why I posted this in the first place. If the insurance industry is starting to take global warming seriously , it is time to worry.
    Hurricaines are not any bigger than they were before. The earth is not getting any warmer than it has in the past. That is scare talk based on ignorance. The problem is more people living in areas like Florida where hurricaines happen to land predictably often. If the same number of people lived in hurricaine and tornado zones as they did in the 1900's this would not be an issue.

  12. #12
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    Quote Originally Posted by desi View Post
    Hurricaines are not any bigger than they were before. The earth is not getting any warmer than it has in the past. That is scare talk based on ignorance. The problem is more people living in areas like Florida where hurricaines happen to land predictably often. If the same number of people lived in hurricaine and tornado zones as they did in the 1900's this would not be an issue.
    Ha! Only the part about more people living along coastal areas is correct. But the rest of it? Talk about being based on ignorance!!!!!

  13. #13
    Mourning in America madanthonywayne's Avatar
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    Quote Originally Posted by spuriousmonkey View Post
    How did the environmentalists cause the hurricane to happen? Did they pray to the hurricane gods?

    Or did you mean that they objected to a project that would destroy vast tracts of the environment
    Of course the enviromentalists didn't cause the hurricane, anymore than the conservatives did. What they did was oppose a project that would have prevented the flood. And, no, it would not have destroyed vast tracts of the environment.

  14. #14
    Quote Originally Posted by madanthonywayne View Post
    I find it ironic that enviromentalists are making so much hay from hurricane Katrina when the whole situation was caused by them. A flood gate was all set to be built in the seventies which would have prevented the flood. Until some enviromentalists came along and filed a lawsuit which stopped its construction.
    Excuse me, but a floodgate is a huge human endeavor that alters the natural environment. What do you think the area we call Holland would be like without all those dikes? A floodgate project should be judged with as much suspicion as a highway or an offshore oil platform.
    Quote Originally Posted by desi View Post
    Hurricaines are not any bigger than they were before.
    Uh, excuse me again. You apparently missed this part of the original article:
    Since the 1970s, the number of storms intensifying to Category 4 or 5 hurricanes has almost doubled. . . .
    The problem is;
    • After a hurricane, idiotic refugees rush right back in and rebuild.
    • Idiotic local governments don't change the zoning to "HURRICANE PATH: ILLEGAL TO BUILD HERE" and give them the permits.
    • Idiotic banks loan them the money to do it.
    • Idiotic insurance companies sell them the policies that allow the banks to approve the mortgages.
    Oh wait, I guess that last one is about to change.

    I see people rebuilding in areas destroyed by brushfires in southern California, but at least they rebuild better: no wood shake roofs, wider firebreaks, etc. People in southern California DON'T rebuild after mudslides, so they have at least some sense. Why do people in Florida rebuild after hurricanes? Sure, the giant hotels are strong enough to survive, but small buildings are not. Why are we even encouraging New Orleans to rebuild? It just seems foolish to me. Move inland, you fools! Yeah we all love the city but nothing built by man is destined to be permanent.

  15. #15
    Mourning in America madanthonywayne's Avatar
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    Quote Originally Posted by Fraggle Rocker View Post
    Excuse me, but a floodgate is a huge human endeavor that alters the natural environment. What do you think the area we call Holland would be like without all those dikes? A floodgate project should be judged with as much suspicion as a highway or an offshore oil platform.
    Would you prefer Holland without the dikes? Every life lost, all the billions of dollars wasted could have been saved if we'd built the damned floodgate. No possible benefit of not building the floodgate outweighs the cost imposed by not building it.

    I agree it's stupid to build there, but since people were already there, their well being should have been the primary concern.
    Last edited by madanthonywayne; 10-01-07 at 10:27 PM.

  16. #16
    troaty mouth best song ever pjdude1219's Avatar
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    Quote Originally Posted by desi View Post
    Hurricaines are not any bigger than they were before. The earth is not getting any warmer than it has in the past. That is scare talk based on ignorance. The problem is more people living in areas like Florida where hurricaines happen to land predictably often. If the same number of people lived in hurricaine and tornado zones as they did in the 1900's this would not be an issue.
    um there was talk of at a catagory 6 to hurricanes from the weather people

  17. #17
    troaty mouth best song ever pjdude1219's Avatar
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    Quote Originally Posted by madanthonywayne View Post
    Would you prefer Holland without the dikes? Every life lost, all the billions of dollars wasted could have been saved if we'd built the damned floodgate. No possible benefit of not building the floodgate outweighs the cost imposed by not building it.

    I agree it's stupid to build there, but since people were already there, their well being should have been the primary concern.
    and all those people could have been saved if the wetlands on the coast had not been destroyed your point

  18. #18
    Valued Senior Member desi's Avatar
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    Quote Originally Posted by pjdude1219 View Post
    um there was talk of at a catagory 6 to hurricanes from the weather people
    I'm sure there was. That way they could scare more people into listening to their fear mongering. The fact is, if you live on the coast in some areas you are due to get more or less soaked sooner or later from a tropical storm. It was that way before cars and global warming and it will be that way long after the last car has rusted into oblivion.

  19. #19
    Why are insurance companies worried, they have made all kinds of excuses to not pay out to a whole lotta people after Katrina. Frankly the amount of hate directed at them should at least equal the hate of the federal governement.

  20. #20
    Mourning in America madanthonywayne's Avatar
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    Quote Originally Posted by pjdude1219 View Post
    and all those people could have been saved if the wetlands on the coast had not been destroyed your point
    They wouldn't be living near the coast if they hadn't destroyed the wetlands. As I said, give the fact that they were already living there; their safely should have been the paramont concern. They should have built the floodgate. That's my point.

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