The Calculation of Climate Change Risk in the Provision of Insurance

 

It is obvious to anybody that a risk of climate change exists: weather patterns have changed throughout human history and will continue to change over time, to both the detriment and benefit of human settlement. Since insurance deals with the management of risk, efforts to explore the risk of climate change have a valid role in the provision of insurance even from the perspective of those who raise significant questions about the scope, impact, consequences and even existence of global climate change. Thus, we commend NAIC and the EX Task Force for taking the initiative to investigate issues related to climate change. 

 

Although we work for an organization that has long associated itself with public policy issues related to climate change, we will confine these comments to the extent to which the issue should be incorporated in rate, form and solvency regulation. We offer two major comments.

• A Comprehensive Response to Climate Change in the Insurance Sector Requires Fundamental Changes to the Rate and Form Regulation Process
• The Specific Disclosures Required Have Little Relationship to Insurance.