Year 4, Month 4, Day 26: The Price Is Right

The Toledo Blade (OH) speculates on climate change’s impact on the insurance industry:

As a meteorologist for FirstEnergy Corp., Pete Manousos’ job is to keep the electric utility informed about any upcoming extreme weather that might cause outages, or hamper repair crews’ ability to restore power.

But the last two years, that job has gotten harder and harder.

“You have to consider that part of the issue for FirstEnergy is our geographical footprint has gotten larger over the last decade. There’s more exposure to events as a result,” Mr. Manousos said.

“That said, for the portions of FirstEnergy that have been impacted since 2011, the frequency of the extreme events have been notable,” he added.

Whether the country is embarking on a pattern of annual extreme weather events, or merely going through a temporary phase, is impossible to know, the meteorologist said.

But one segment that has a large financial stake in figuring out if the weather is growing more violent and extreme is the insurance industry.

To be sure, the insurance industry knows more than a thing or two about calculating risk, and the industry has never been healthier financially, according to the New York-based Insurance Information Institute.

However, the increasing frequency of catastrophic weather events over the last three years — including some that affected Ohio in general and northwest Ohio in particular — are causing some in the insurance industry to adjust their climate-risk models and consider establishing a new baseline for weather events in the future.

Premium coverage! April 14:

Given their significant role in weakening health care reform, it seems strange to wish that major insurers had even more influence on Congress — but these companies might be the only corporate actors able to overcome fossil fuel corporations’ determination to block meaningful legislative action on climate change.

As the greenhouse effect accelerates, extreme weather will increase in severity and frequency everywhere in the world. On a local and regional level, that means more homes destroyed, more agriculture devastated, more infrastructure disrupted, leading to more damage claims — a connection that’s already part of the insurance industry’s calculations. Conservative lawmakers are fixated on the electoral risks of offending their tea-party constituents and the fiscal risks of crossing their Big Oil and Big Coal paymasters; by contrast, insurance companies have everything to lose and nothing to gain from policies built around ideology rather than data.

As do the rest of us.

Warren Senders

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