Given that the world’s largest reinsurance firm – Munich Re –
warned us five days ago that insurance premium rate rises could become a social
issue, is climate change making insurance coverage too expensive for ordinary
people?
By: Ringo Bones
Insurers around the world manage to reach a consensus five
days ago to issue a warning that climate change could make coverage for
ordinary people unaffordable after the world’s largest reinsurance firm blamed
global warming for 24-billion US dollars (18-billion UK£) of losses in the California
wildfires. Ernst Rauch, Munich Re’s chief climatologist, told the Guardian
newspaper that the costs could soon be widely felt, with premium rises already
under discussion with clients holding asset concentrations in vulnerable parts
of the state. From my point view, it could only be a matter of time for
insurance claims adjusters, insurance brokers and anyone at the leading
insurance companies’ underwriters’ box to set premiums rates for flood and fire
insurance for Malibu, California homeowners to rival that of Lloyd’s Of London’s
“unique risks” coverage – i.e. coverage for risks whose actuarial figures and
adequate tables of probability are not available, as in like those of insurance
coverage for the sudden reappearance of the “Loch Ness Monster”.
According to Munich Re, the lion’s share of California’s 20
worst forest fire blazes since the 1930s have occurred in the 21st
Century, in years characterized by abnormally high summer temperatures and “exceptional
dryness” between the months of May and October. And Munich Re’s chief
climatologist Ernst Rauch states that: “If the risk from wildfires, flooding,
storms and hail is increasing then the only sustainable option we have is to adjust
our risk price accordingly. In the long run it might become a social issue”.
Too bad there’s still no coverage yet for a so-called “President Trump Climate
Change and Global Warming Denial Insurance”.
