<div dir="ltr"><div><div><br></div>Insurance companies don't have a political or ideological agenda, for the most part. They look at the facts and do the math to objectively calculate risk probability of events they insure for... Thus if insurance industry think tanks, as referenced in this article, are already calculating the costs of climate change, the "global warming is a hoax" or "global warming won't be destructive" arguments are on rather weak factual and rational grounds, it would appear...<br>
<br></div><div>To quote from this article:<br><br></div><div>"Denying climate change isn't just foolish---it's bad for business"<br>--------------------------------------------<br></div><div><p>
"Florida is a case in point. There, where some 2.4 million people live
less than four feet above the high-tide line and where many U.S.-bound
hurricanes are likely to pass, insurers can only use historical models
to calculate risk. Climate scientists estimate that sea levels will rise
anywhere between 8 inches and 6.6 feet by 2100 — enough to inundate
whole neighborhoods in Miami, even on the lower end. The past offers a
comfortable fiction that could limit rate hikes by writing the risk off
the books. </p>
<p>
As more groups like the Geneva Association call for risk models that
account for climate change, politicians are going to get a different
message. Denying climate change isn’t just foolish — it’s bad for
business."<br></p><p>------------------------------------------<br></p></div>Vision2020 Post: Ted Moffett<br><div><br></div></div><div class="gmail_extra"><br><br><div class="gmail_quote">On Tue, Aug 27, 2013 at 6:44 AM, Art Deco <span dir="ltr"><<a href="mailto:art.deco.studios@gmail.com" target="_blank">art.deco.studios@gmail.com</a>></span> wrote:<br>
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex"><div dir="ltr">
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<a href="http://www.nytimes.com/" target="_blank"><img alt="The New York Times" align="left" border="0" hspace="0" vspace="0"></a>
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<div>August 27, 2013</div>
<h1>Mutually Insured Destruction</h1>
<h6>By
<span><span>MAGGIE KOERTH-BAKER</span></span></h6>
<div>
<p>
In March 1947, a winter of heavy snowfall followed by a quick thaw and
torrents of rain swelled rivers throughout England and Wales. Over the
course of just 13 days, at least 27,000 homes and businesses were
flooded. It was one of the worst natural disasters in British history.
But thanks to climate change, which can prevent the thick snowpack from
which spring floods draw their strength, that sort of flood may be less
likely to happen today. </p>
<p>
The seemingly inexorable (and increasingly irreversible) march of
planetary warming is something we tend to associate with increased
devastation — floods and famine, droughts and storms. In many cases,
that’s true. But there’s a reason scientists prefer the term “climate
change” to “global warming” — not everything is getting warmer. As the
global average temperature rises, it alters weather systems, changing
patterns of heat and cold and shifting wind currents. Risk is
redistributed along with them. </p>
<p>
No one understands risk better than the insurance industry — except,
perhaps, the reinsurance industry, the companies that sell insurance to
insurers, which also need protection from risk exposure. As the risk
managers for the risk managers, reinsurers follow climate change
obsessively. A great deal of money is at stake. If the 1947 spring
floods happened today, they could cost the insurance industry as much as
$24 billion. </p>
<p>
<span style="color:rgb(255,0,0)"><b>In June of this year, the Geneva Association, an insurance research
group, released a report called “Warming of the Oceans and Implications
for the (Re)insurance Industry.” It laid out evidence explaining how
rising ocean temperatures are changing climate patterns and called for a
“paradigm shift” in the way the insurance industry calculates risk.
Traditionally, insurers have predicted the future by studying the past.
If your house is on a 100-year flood plain, for example, that’s because
an actuary looked at historical data and calculated that there’s a 1
percent chance of your neighborhood’s experiencing a flood of a certain
magnitude every year. Over the course of 100 years, that massive flood
is likely to happen about once. </b></span></p><span style="color:rgb(255,0,0)"><b>
</b></span><p><span style="color:rgb(255,0,0)"><b>
But the past can no longer reliably predict the future. A 2011 paper in
The Journal of Hydrology suggests that the risk of spring floods
associated with snowmelt in Britain will decline. That same year, a
paper published in the journal Nature indicated there may be a link
between climate change and an increased risk of <em>fall </em>flooding in Britain.</b></span> </p>
<p>
To fully grasp how our changing climate affects their downside, the
insurance and reinsurance industries need new ways of modeling risk —
systems that look at what’s happening now rather than what happened
decades ago. That drive is leading insurance wonks to join forces with
climate scientists, who might have found a solution. </p>
<p>
<strong>While the ever-practical</strong> insurance industry has long
focused on the past, climate science has, for the most part, been
fixated on the far future. Scientists built computer models of virtual
worlds and used them to test hypotheses about what would happen to our
children and grandchildren as the planet becomes hotter. </p>
<p>
“But for most practical decisions,” says Myles Allen, a climatologist at
Oxford University, “what the world will be like in 50 years’ time is
less important than understanding what the world is like today.” </p>
<p>
A new method of statistical analysis called “event attribution,”
developed by Allen, allows climate scientists to better understand how
weather patterns work today. It examines recent severe weather events,
assessing how much of their probability can be attributed to climate
change. These impacts are so complex that isolating them would be like
taking the sugar out of a chocolate-chip cookie — nearly impossible,
everything is so intertwined. Event attribution tries to break through
this ambiguity using brute force. </p>
<p>
Harnessing a tremendous amount of computing power, scientists create two
virtual worlds: one where the atmosphere and climate look and operate
like ours does today, and one that looks more like the preindustrial
world, before we started releasing greenhouse gases from factories, cars
and buildings. They alter the weather in both simulated environments
and see whether natural disasters play out given differing sea-ice
levels, greenhouse-gas concentrations and sea-surface temperatures. They
do this over and over and over, tens of thousands of times, producing
an estimate of how much our altered climate affected the outcome.
</p>
<p>
It’s a slow process that requires sophisticated software, which is why
it’s a relatively recent development. It took Allen and his team six
years and 50,000 simulations to analyze the causes behind an episode of
fall flooding in Britain in 2000. Eventually, they were able to say
this: 9 times out of 10, the world with climate change had a 20 percent
greater chance of experiencing those floods than the world without.
</p>
<p>
That sort of less-than-satisfying answer is common with event
attribution. In 2012, Allen and his team published a paper on the heat
wave that baked huge swaths of Russia in the summer of 2010. Their
conclusion: that climate change made only a modest contribution, but a
warmer climate had made that sort of heat wave more likely to occur in
general. </p>
<p>
It doesn’t fit well on a protest placard, but this information may one
day help build better actuarial tables, translating complicated data
into real-world impacts. If reinsurers expect to spend more money on
losses in your region, your insurance company’s insurance gets more
expensive, and your policy should, too. But it doesn’t always work that
way. </p>
<p>
Florida is a case in point. There, where some 2.4 million people live
less than four feet above the high-tide line and where many U.S.-bound
hurricanes are likely to pass, insurers can only use historical models
to calculate risk. Climate scientists estimate that sea levels will rise
anywhere between 8 inches and 6.6 feet by 2100 — enough to inundate
whole neighborhoods in Miami, even on the lower end. The past offers a
comfortable fiction that could limit rate hikes by writing the risk off
the books. </p>
<p>
As more groups like the Geneva Association call for risk models that
account for climate change, politicians are going to get a different
message. Denying climate change isn’t just foolish — it’s bad for
business. </p>
<div>
<p>Maggie Koerth-Baker is science editor at <a href="http://boingboing.net/" target="_blank">BoingBoing.net</a> and author of “Before the Lights Go Out,” on the future of energy production and consumption.</p><span class="HOEnZb"><font color="#888888"> </font></span></div>
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<br clear="all"><br>-- <br>Art Deco (Wayne A. Fox)<br><a href="mailto:art.deco.studios@gmail.com" target="_blank">art.deco.studios@gmail.com</a><br><br><img><br>
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