Executive Briefings

As Businesses Include Climate Change in Supply Chain Risk Plans, Property Insurers Don't Keep Pace

From a purely business standpoint, considerations of where and how to build facilities (or alter existing ones) to lessen climate risk have moved up the risk management priority list. Such moves can ward off costly business stoppages in the event of extreme weather events. Perhaps more significant, on an ongoing basis, they also earn lower property insurance premiums.

That would seem to suggest that property insurers are taking climate change into account when underwriting policies. Oddly - at least to anyone who's not close to the insurance industry - insurers are not doing so, for the most part.

Even with the world increasingly gripped by concern over climate change, and despite insurers looking closely at the implications of a warming planet for their business, the industry appears to be pretty much in business-as-usual mode.

“There is work being done to incorporate climate risk as a reasonable consideration in pricing and reserves as an industry-standard best practice,” says Lindene Patton, an attorney and independent consultant. “But it’s not there yet.”

Read Full Article

That would seem to suggest that property insurers are taking climate change into account when underwriting policies. Oddly - at least to anyone who's not close to the insurance industry - insurers are not doing so, for the most part.

Even with the world increasingly gripped by concern over climate change, and despite insurers looking closely at the implications of a warming planet for their business, the industry appears to be pretty much in business-as-usual mode.

“There is work being done to incorporate climate risk as a reasonable consideration in pricing and reserves as an industry-standard best practice,” says Lindene Patton, an attorney and independent consultant. “But it’s not there yet.”

Read Full Article