This seems based on outdated science to me. The world isn't just "getting hotter", the overall climate is changing due solely to human influence. The article makes it sound like insurers believe houses will start spontaneously combusting. What they should really worry about is desertification in populated areas and flooding along the coasts, and the inevitable humanitarian crisis and necessary social restructuring that those will require. We can't leave this to insurers - we need strong cooperation between governments and academia to plot a better course into our brave new world.
Because they’re the ones who are supposed to pay money when shit blows up, and they are finally at the point where the giant flaming signs that it’s going to all blow up are within foreseeable shareholder ownership periods.
Chunks of NZ are becoming very expensive to uninsurable, and extreme impact weather events are getting more frequent.
It would be fair say a good portion of the population don't understand the maths of a weather event just how astronomically expensive a sudden flood is.
In our small town in the last 5 years, we've had 2-3 different "1 in 100 year" floods within 30km of each other (highly localised dramatic flooding and slips). To the point "1 in 100 year" is now a standing joke.
Not a big fan of "uninsurable". They'll happily insure high risk stuff, for an appropriate premium. It just becomes unaffordable to the average family.
As a side note there is another insurance disaster in the making - shadow fleet carrying millions of barrels of oil in old ships with opaque ownership and even murkier maintenance history...they don't do the whole insurance thing. Only a matter of time before the world faces a very awkward "who's picking up the bill" discussion. Small one already happened in the Black sea.
Well it makes no sense for a company to try to insure properties that are fully expected to be damaged regularly (e.g. due to seasonal flooding, fires etc). That would make the premiums equivalent to the rebuilding costs if the company is to operate long term and customers won't pay for those kinds of premiums. It's not a viable business and so why would an insurance company spend effort to try to offer that product?
Risk feels like a pendulum that periodically needs to swing back to the individual property owners. We're probably entering a cycle where homes need to be built in less risky locations and built more durable to risk.
First, insurance companies should be the last thing we consider when setting policy, this is propaganda for them trying to protect their racket, not anything more telling.
Second, governments and private companies should be looking at (socializing) mitigations that will keep risk within tolerable levels (without caring whether some legacy insurer continues to be able to gouge cusotmers). If there's a clear and identifiable threat, we can build dikes or sea walls or spillways or whatever it is that can alleviate the issue. "Think of the insurance implications" is a silly distraction.
Well, insurance companies should be the most knowledgable about potential risks. Personally, I don't think it makes sense to spend lots of money to continue building in unsustainable locations (e.g. regular flooding) and we shouldn't be socialising those risks. Building mitigations can make sense in some circumstances, and that should reduce insurance premiums after they've been shown to be effective.
The first point isn't really true. We should definitely consider insurance company input when setting policy, we just have to be careful we consider if it's self serving BS, politically motivated nonsense, or intelligent concern with policy changes that could benefit humanity by mitigating the problem. As long as your putting 80% of what they say into bucket 1 or 2 you're probably fine.
I'm confused that this article made no mention of laws preventing insurance companies from accurately pricing insurance.
Otherwise they can increase the price to match the risk. Even if the risk is unpredictable they could increase the price until they were comfortable with the risk, or themselves get insurances to cover the risk of providing insurance.
That shouldn't be a major factor as it's the repair/rebuild costs that insurance companies are interested in. If house prices increase, it doesn't mean that it would cost more to rebuild them.
This doesn’t seem surprising and I hope it isn’t. David Suzuki and others have gone on record saying that we’ve lost the climate fight. Politics and economics are useless at preventing it. Oil and gas won. We’re locked in for a post 1.5 C world.
You can’t insure against catastrophes that are basically guaranteed to happen.
It’s too late to restructure to prevent catastrophic climate change. Seems like all we can do is restructure to survive and take care of one another for as long as we can.
I recall the insurance industries lost so much in the 2008 financial crisis that it wiped out all their profitability over all of human history to that point. I imagine they haven't made enough in the last two decades to outweigh those losses, so they probably are a net-negative as an industry, which is very funny.
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[ 607 ms ] story [ 85.8 ms ] threadIt would be fair say a good portion of the population don't understand the maths of a weather event just how astronomically expensive a sudden flood is.
In our small town in the last 5 years, we've had 2-3 different "1 in 100 year" floods within 30km of each other (highly localised dramatic flooding and slips). To the point "1 in 100 year" is now a standing joke.
As a side note there is another insurance disaster in the making - shadow fleet carrying millions of barrels of oil in old ships with opaque ownership and even murkier maintenance history...they don't do the whole insurance thing. Only a matter of time before the world faces a very awkward "who's picking up the bill" discussion. Small one already happened in the Black sea.
Second, governments and private companies should be looking at (socializing) mitigations that will keep risk within tolerable levels (without caring whether some legacy insurer continues to be able to gouge cusotmers). If there's a clear and identifiable threat, we can build dikes or sea walls or spillways or whatever it is that can alleviate the issue. "Think of the insurance implications" is a silly distraction.
Otherwise they can increase the price to match the risk. Even if the risk is unpredictable they could increase the price until they were comfortable with the risk, or themselves get insurances to cover the risk of providing insurance.
You can’t insure against catastrophes that are basically guaranteed to happen.
It’s too late to restructure to prevent catastrophic climate change. Seems like all we can do is restructure to survive and take care of one another for as long as we can.