Insurance companies manouver around the threats of climate change- consumers will pay

How the insurance industry sees climate change, LA Times, EUGENE LINDEN 16 June 14 Twenty years ago, I interviewed Frank Nutter, then and now president of the Reinsurance Assn. of America, on the threat climate change posed to the $2-trillion-plus global property and casualty insurance industry.

“It is clear,” he said back then, “that global warming could bankrupt the industry.”

But in the two decades since, the industry mostly limited itself to talk, sponsoring innumerable reports on the threat. Now a major insurance company has moved to protect itself, and it may be the most important milestone yet in the struggle to contend with global warming. FOR THE RECORD

It is clear that global warming could bankrupt the industry.- Frank Nutter, president of the Reinsurance Assn. of America Climate change: A June 17 Op-Ed article accurately reported on nine class-action lawsuits filed by insurance company Illinois Farmers against cities and counties for failing to take steps to prevent losses related to climate change. Farmers has withdrawn the lawsuits, saying it believes that its “policyholders’ interests will be protected in the future” and that it hopes to continue “constructive” conversations with the cities and counties.

The Op-Ed said Farmers is owned by Zurich Group. It is not; Zurich Group owns Farmers Management Co., which provides administrative oversight to Farmers……….

While Floridians wait for the next big storm, sea levels — the most obvious worldwide signal of global warming — continue their inexorable rise. Rising waters have already created Venice-like conditions in the Miami area.

All the nation’s taxpayers have assumed this risk as insurers routinely exclude flood and storm surge damage from policies. This forces homeowners to seek coverage with the National Flood Insurance Program, a tax-dollar backed program also forced by political pressure to under-price its coverage.

Between the state program and federal flood insurance, the American middle class has been given the burden of insuring and subsidizing the affluent. Let’s call it climate change socialism for the rich.

After news of the Farmers’ lawsuit broke, I spoke again with Nutter. He said he too was surprised at how long it has taken for the risk of climate change to percolate through the insurance community. He also pointed out that Farmers is owned by the Zurich Group, which is noteworthy because European insurers, with global reach and exposure, tend to be more attentive to the risks of climate change than domestic insurers.

Is it possible that U.S. insurers are also affected by climate-change deniers? A number of recent studies by the Insurance Information Institute have singled out Florida as having the most exposure to the combined impacts of climate change, but its governor, Rick Scott, and Sen. Marco Rubio are on record dismissing the threat.

And yet everyone can see that sea levels are rising. Miami Beach Mayor Philip Levine told the New York Times last month, “We are past the point of debating climate change.”

Now, as insurers begin to shift the costs of that reality through rate increases, exclusions, lawsuits and market retreat, consumers can ask such politicians, “Why, if climate change is a hoax, are we paying for it?”http://www.latimes.com/opinion/op-ed/la-oe-linden-insurance-climate-change-20140617-story.html