Climate change insurance threat or opportunity
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Climate Change & Insurance: Threat or Opportunity?. Brett Schreiber Marketing Fisher College of Business. Global Warming Determination. Intergovernmental Panel on Climate Change (IPCC) is made up of thousands of scientists that come up with a defined statement on climate change

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Climate Change & Insurance: Threat or Opportunity?

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Climate change insurance threat or opportunity

Climate Change & Insurance: Threat or Opportunity?

Brett Schreiber

Marketing

Fisher College of Business


Global warming determination

Global Warming Determination

  • Intergovernmental Panel on Climate Change (IPCC) is made up of thousands of scientists that come up with a defined statement on climate change

  • 5assesments have been made with the last assessment being in September of 2013

  • http://www.youtube.com/watch?v=rFYbdHW7QAM


Highlights from ipcc ar5

Highlights from IPCC AR5

  • 95% sure the climate change is manmade

    • Increase from 90% in 2007 and 66% in 2001

  • “The pause”- .22 deg F increase per decade since 1950 while this has leveled off to .09 deg F since 1998

  • Conflict: models are not reproducing warming of last 15 years

    • El Nino/La Nina


  • Human impact on climate change

    Human Impact on Climate Change

    • Differences in land cover

    • Release or cleanse of pollutants

    • Release or cleanse of greenhouse gases


    What insurance c ompanies think of the climate change

    What Insurance Companies Think of the Climate Change

    • There has been almost unanimous agreement that the climate is changing

    • Mainly worry about increasingly severe weather events and global warming

    • More severe natural disaster makes for more cost in damages.

      • Ex: 12.3 billion dollars going to corn farmers that suffered from last years drought


    Pricing response

    Pricing Response

    • With increased severity of these weather events, potential losses are inevitable

    • Talks of risk adequate pricing and less availiability in high risk areas


    Risk management response

    Risk Management Response

    • Loss prevention is thought of as a more reasonable approach

    • By limiting the amount of on-site fuel accumulation, changing roofing materials, clearing brush around the buildings and even by not using a lot of oil-based plants in the landscaping, “we can manage the liability so we can still put our capacity out there even in high-risk zones.”  -Zurich Insurance


    Opportunity

    Opportunity

    • A more climate threatened world gives insurance companies the ability to increase revenue through covering other emerging business that is trying to solve the problem

    • Most seen in alternative energy

    • Some governments encourage alternative energy with incentives

      • Ex: Germany and solar power

    • Risk of renewable energy is that they may not be operational in some nature conditions.


    Review

    Review

    • IPCC determined 95% of climate change is human caused

    • The increase in temp. has leveled off but thought to be due to El Nino/La Nina

    • Major Human impact on climate includes altering land cover, pollutants, and GHGs

    • Climate change does provide difficulties for insurance companies, but also gives opportunities through renewable resources and risk management


    Sources

    Sources

    • http://www.propertycasualty360.com/2013/02/05/climate-change-insurance-existential-threator-ex?t=climate-change&page=

    • http://ecoopportunity.net/2013/03/climate-change-and-insurance-a-looming-threat-to-the-economy

    • http://www.ipcc.ch


    Questions

    Questions?


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