A report released Tuesday shows the climate emergency caused by fossil fuels accounted for an estimated $600 billion in insured weather losses worldwide over the last 20 years, targeting the insurance industry. The campaign calls this “insurers have been putting a huge price tag on climate change for years.” passed on to the policyholder. ”
Insure Our Future, the international campaign behind the 8th annual scorecard, is supported by advocacy groups including Ekō, Greenpeace, Mazaska Talks, Public Citizen, Rainforest Action Network, Reclaim Finance, The Sunrise Project and Waterkeeper Alliance It has been.
The report, entitled ‘Within our power: reducing emissions today to guarantee tomorrow’, examines what 20 years of climate attribution science has revealed about today’s insurance crisis. , examines the status of gross direct premiums from insurance of fossil fuel and renewable energy activities, and the coal, oil, and gas policies of 30 large primary insurers and reinsurers. ”
From 2002 to 2022, losses from climate change amounted to about $30 billion a year, but the economic burden was not evenly distributed over that 20-year period. Rather, the report says such losses have “recently increased as a proportion of insured weather losses, demonstrating how important decarbonization is to curbing soaring insurance costs.” states.
“The proportion of insured losses due to weather has increased from 31% to 38% on average over the past decade, with the annual growth rate (6.5%) significantly outpacing the growth in insured losses (4.9%),” the publication said. Things are explained. “In 2022, $52 billion of the $132 billion was attributable to climate.”
Other key findings include:
Estimated climate change losses for 28 major property and casualty insurance companies ($10.6 billion) were close to the fossil fuel premiums they collected in 2023 ($11.3 billion), and more than half exceeded that amount. The renewable energy insurance market remains in decline. The size of the fossil fuel insurance market will reach 30% in 2023, threatening to become a bottleneck for climate change investment. And with temperatures on the verge of 1.5°C, insurers are increasing these risks by enabling the expansion of fossil fuels, while abandoning at-risk communities around the world, and calling for immediate policy and regulatory action. is required.
The report acknowledges that the findings come amid warnings from scientists that 2024 is on track to exceed the Paris Agreement’s temperature rise target of 1.5C for the first time this century. . The latest meeting of countries that signed the treaty, held in Azerbaijan last month, ended in what critics called a “massive FU on climate justice.”
Like many activists and experts outraged by the conclusion of COP29, Ilan Noy, a professor of disaster and climate change economics at New Zealand’s Victoria University of Wellington, has become bolder in the wake of the Insure Our Future report. He emphasized the importance of global action.
“Insurance companies fundamentally misunderstand climate risk by failing to recognize how greenhouse gas emissions have driven losses throughout this century,” Noy said in a statement. “Unless emissions are significantly reduced this decade, the damage caused by climate change will increase exponentially, potentially overwhelming both insurance companies and the economy.”
Laurie Laybourn, director of the UK-based Strategic Climate Risk Initiative, similarly argued that the climate emergency poses an existential threat to the insurance industry while discussing the Insure Our Future report with Forbes magazine’s David Vetter. He suggested that it was.
“Insurance impacts are increasing, and the lack of an insurance system built for climate change will only make this situation worse,” Laybourn said. “As we are already seeing, government intervention is required to effectively ensure that insurance can continue to exist in certain locations.”
“Flood insurance is becoming increasingly regressive in Florida, and the government is having to decide what and how to cover it,” he noted. “Similarly in the UK, major flooding led to the establishment of Flood Re, a government-backed reinsurance company that covered areas that were virtually uninsurable on the private market.”
Mr Laybourn warned of the potential for a “loop of doom” where climate impacts would cause instability and prevent appropriately ambitious action, adding: “Even if the situation becomes more volatile, we remain committed to decarbonisation. We need more resilient systems so that we can continue to do so.”
New report provides a roadmap to a more resilient insurance system. As the document notes, this is the first time Insure Our Future has included policy recommendations for lawmakers and regulators.
The publication calls on insurers to immediately stop providing insurance to new fossil fuel projects and customers in industries that have not announced plans for transitioning to the 1.5°C target. It also calls on insurance companies to set their own binding targets in line with the Paris Agreement and divest from coal, gas and oil companies.
The report also urges insurers to align their stewardship activities, industry association memberships and public positions to a credible 1.5°C pathway. Establish mechanisms to ensure that clients fully respect human rights. And he is considering taking fossil fuel companies to court “to make polluters pay rather than insurance customers.”
