Insurance Essay

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DD E A L NN GW I TT HDD S S A S T E R S EALI I G WI H II ASTERS S PECIAL S ECTION VIEWPOINT Insurance in a Climate of Change Evan Mills* mum losses for single events rather than for entire insurance Bseasons.[ The limitations of this approach were evident in the 2004 U.S. hurricane season and its $60 billion in economic losses (of which half were insured). The weather-dependent share of global insured catastrophe losses (È90%) is greater than that experienced by the economy as a whole (È75%) (Fig. 1). This, coupled with the increase in the number, cost, and variability of such losses (Fig. 2), has brought some insurers, The availability and affordability of insurBusiness and science meet in the wake of reinsurers, and their trade associations to view ance are grist for economic development and the disasters. The insurance sector is a lightning climate change as a strategic factor in their financial cohesion of society, as well as serod, serving as global integrator of impacts future (6–8). curity and peace of mind in a world where the across all sectors of the economy, and messenVirtually all segments of the industry knowledge of hazards lags their evolution. Unger of these impacts through the terms and price have a degree of vulnerability to the likely anticipated changes in the nature, scale, or signals it projects to its customers (1). As the impacts of climate change, including those location of hazards are among the most imworld_s largest industry Eit would be the third covering damages to property (structures, portant threats to the insurance system. History largest country if its $3.2 trillion in yearly automobiles, marine vessels, aircraft); crops has shown that society in general, and insurers in revenues were compared with national gross and livestock; pollution-related liabilities; particular, are often caught unprepared for osdomestic products

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