Wednesday, 25 October 2006
New Report On Global Warming: Expect Insurance Price Hikes
People in some industries like to point out that global warming is an unproven theory. Meanwhile, the insurance industry is quickly embracing it as a fact — and including it in their pricing models.
Scientists say global warming is causing an increase in the number and intensity of hurricanes. Coastal areas can expect to see their insurance premiums go up in the coming years.
A joint report by the Allianz Group and the World Wildlife Fund suggest that insurance companies need to take global warming into account when pricing these areas.
“That it will cost more, there’s no question; we can put that on the table right at the beginning,” said Allianz Group board member Clem Booth. “The pricing of an insurance portfolio in a coastal region is a matter of the number of incidents to be expected within a given time and the size of incidents at certain levels.”
Booth added: “To me as an insurance person, climate change is an absolute reality. We could debate to what extent it’s affected by human activity or not but it doesn’t change the fact that we have to deal with the additional risks.”
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