A September research report by Ceres, a Boston-based business sustainability advocacy organization, was eerily prescient.
Ceres published the white paper titled, "Stormy Future for U.S. Property/Casualty Insurers: The Growing Costs and Risks of Extreme Weather Events."
The Ceres report examined how extreme weather trends may be a harbinger of significant challenges ahead for a sector in which many companies are already confronting profitability and growth challenges. The analysis was based on a review of U.S. property and casualty insurance industry financial results as reported by A. M. Best Company in early 2012.
"Extreme weather is hitting the United States with a vengeance and it poses a growing threat to the insurance industry and vast segments of society that rely on insurance for peace of mind and financial security. This summer's devastating drought and record-high temperatures are only the latest reminders of the far-reaching impacts that climate change and extreme weather events pose to U.S. property and casualty insurers still reeling
from last year's $32 billion of insured losses from such events," Washington Insurance Commissioner Mike Kreidler wrote in the first sentence of the foreword of the report.
A month later, superstorm Sandy struck the East Coast, causing an estimated $50 billion in economic damages, including about $10 billion to $20 billion of insured losses, according to Eqecat Inc., a provider of catastrophic risk models for the insurance industry.
Sandy's fury and other rising incidents of horrific weather-related carnage should be of concern to all businesses because of the implications on the affordability and practicality of property and casualty insurance.
In other words, we're all going to absorb those losses, even if we here in Wisconsin were not directly in Sandy's path.
"As the Washington Insurance Commissioner, I am concerned because increasing weather-related losses pose threats to the industry's financial stability, which could ultimately lead to a crisis of affordability and availability of essential insurance for consumers and businesses, as well as solvency problems for insurers themselves. Potentially larger extreme weather losses in the future, driven by climate change, make these scenarios especially worrisome," Kreidler wrote in September, not knowing at the time that Sandy was right around the corner.
According to the report, more than 25,000 new record high temperatures were set in 2012 alone in the United States. The report stated that 2011 was "the deadliest thunderstorm and tornado season in more than 50 years," resulting in almost 550 fatalities across the country.
"Property insurance affordability and availability is already coming under increasing pressure due to increasing extreme weather losses," the Ceres report stated.
When the Great Recession hit in 2008, public discourse about "global warming" became almost quaint, as people were more focused on keeping their jobs or keeping their businesses open as the economy cratered. It seemed to many that only tree-hugging, Al Gore-loving hippies were concerned about "climate change."
The warmest climatological year on record and recent catastrophic events such as Hurricane Sandy changed that. According to a new poll by The Associated Press-Gfk, 80 percent of Americans now believe global warming will be a big problem for the nation if it does not take action to reduce it.
Corporate members of Ceres include giant corporations such as Bank of America Corp., Best Buy Inc., Citi, The Coca-Cola Company, Dell Inc., Ebay Inc., Ford Motor Co., General Mills Inc., General Motors Co., Nike Inc., Prudential Financial Inc., Time Warner Inc. and Walt Disney Co.
The causes of climate change can be disputed, but its very existence is now beyond debate. So, let's focus on how we are going to deal with it.
Wait a second here, @mikeb. Are you trying to say that 160 years worth of weather/temperature tracking isn't accurate when stacked up against the 4.5 billion years the Earth has been around? I don't know... it seems much more logical to make sweeping generalizations and assumptions.
For anybody that needs a real world example of what the Al (Jazeera) Gore's of the world are pushing on you... it would be akin to finding 1 needle in a silo full of hay, and then stating "well with this find, we can therefore determine the silo is full of needles."
Some mental midgets can't be bothered with things like science. Ignore the scientific facts of climate change and its effects on our infrastructure at your own peril.
In grade school I was taught about the Ice Age and how much of Wisconsin was once under Ice. Given that we're not under ice right now, means that global temperatures must have risen at some point. Yes, we had the warmest year on record but there are two things to consider:
- recorded temperatures account for a minuscule part of the Earth's existence
- Can we prove that this warming was "man-made". After all, we did warm from the Ice Age period with nary a carbon emitting machine in sight
A granola advocacy group writes a scare-report about perceived global warming making insurance unaffordable, and that's a prediction of a natural disaster? Yawn.
Let me try my hand at that: With as many people driving as there are today, eventually there will be an accident on the freeway. Possibly even a rural road. That accident will cost money, and insurance rates will go up. We better start pulling all the cars off the road we can now before this accident occurs. Don't say I didn't warn you.
4 comments about this article.
Post your comment/review now
Disclaimer: Please note that Facebook comments are posted through Facebook and cannot be approved, edited or declined by OnMilwaukee.com. The opinions expressed in Facebook comments do not necessarily reflect those of OnMilwaukee.com or its staff.
Recent Articles & Blogs by Steve Jagler
Published Feb. 19, 2014
Take a good, hard look at outgoing State Senators Dale Schultz (R-Richland Center), Tim Cullen (D-Janesville) and Bob Jauch (D-Poplar). They are members of an endangered species.
Published Feb. 13, 2014
In this harsh Wisconsin winter, a citizen video is sparking public pressure against Simon Property Group's decision to move the public bus stop 1,000 feet away from Southridge Mall's entrances.
Published Feb. 7, 2014
When the Wisconsin State Legislature convened in early 2013, the Republican majority made Senate Bill 1 to streamline the state's mining regulations a top priority. Nearly a year later, the bottom has fallen out of the mining industry, and the bill is being exposed for what it was: a law written by proponents of the mining industry that was not tenable with federal environmental standards.
Published Feb. 6, 2014
BizTimes is restructuring its editorial team, and the changes will have an impact on how the business community interacts with our company and how our award-winning editorial content is generated.
Published Jan. 30, 2014
Word to the wise: If your cell phone receives a one-ring phone call from a number you do not recognize, do NOT call the number back to inquire about whom was calling you.
Published Jan. 17, 2014
Economist Michael Knetter is forecasting the national gross domestic product (GDP) to grow by 3 percent in 2014. Knetter, president of the University of Wisconsin Foundation, issued his macroeconomic projections for the year ahead to an audience of more than 500 people at the Northern Trust Economic Trends Breakfast presented by BizTimes Media at the Italian Community Center in Milwaukee today.
Published Jan. 8, 2014
If no county solution - including new taxation - is found to build a new Downtown arena, we must understand and be prepared to live with the consequences.
Published Dec. 18, 2013
There's something to be said for having the last laugh and having the best laugh in business. In this case, I'm referring to the Chicago grocery market. Bob Mariano began his career in that market by working as a high school student as a clerk at the deli counter of a Dominick's Finer Foods store. Mariano diligently worked his way up the company's ladder, ultimately becoming its chief executive officer.
Published Nov. 22, 2013
Steve Jagler asks some Milwaukee notables about their memories of the assassination of President John F. Kennedy 50 years ago today in Dallas.
Published Nov. 13, 2013
In the past two years or so, Menomonee Falls-based Kohl's Corp. has been in a corporate lull of sorts. However, the good news is that Kohl's management team is showing signs that it is aware of the stagnation and is making changes to shake things up a bit.