By Paul Homewood
Today’s fake news comes from the Telegraph:
By Lucy Burton
It was a summer the insurance industry will never forget. Floods like the one caused by Hurricane Harvey are supposed to happen once every 500 years. But Houston has seen three in three years, with Harvey being the most powerful hurricane to hit Texas in half a century. Meanwhile, Irma, which wrought devastation with sustained winds of 185mph, is one of the strongest storms ever recorded.
While the costs of the catastrophes are still being assessed, insurers are expecting losses of more than $70bn (£52bn) – down from the initial $150bn feared from Irma but still enough to make 2017 one of the worst years on record. Reinsurance groups are expected to be the hardest hit, with the world’s largest, Munich Re, already warning that the events will threaten its ability to meet full-year earnings.
But it is not just the financial costs weighing on the insurance industry. Scientists say the scale of the destruction was exacerbated by climate change, and insurers are coming under pressure to do more to help limit the damage as the world prepares for extreme weather to become the new norm – the average number of Category 4 storms per year has already more than doubled since 1900.
The UK isn’t immune to that threat. With annual flood damage costs expected to rise from £1.1bn today to £27bn by 2080, Inga Beale, the Lloyd’s of London chief executive, makes clear that “concerns are mounting” in this country too.
Drone footage shows extent of Irma damage in Florida
“As an industry on the front line of tackling climate-related catastrophes we have a duty to drive action,” she said. “We need to continue to build up our resilience to these catastrophic events in every way we can.”
As it stands, these include offering premium discounts that encourage certain behaviour – building a house on stilts, for example, could come with a cheaper flood insurance policy because the house is likely to be more protected and the claim cheaper – as well as collaborating with the Government to launch projects in high-risk areas, as seen in the UK last year with the launch of reinsurance initiative Flood Re.
But as the planet warms, experts argue that the response needs to be bolder and faster. It not only needs to protect society from the risks, but also play an active role in reducing the impacts of climate change.
“[The sector] is well organised, multi national, and with annual premiums amounting to 6pc of global GDP has the necessary financial clout to make it happen,” said University of Oxford statistician Anthony Webster, arguing that insurers need to now take the lead on finding solutions.
“An insurance-led response to climate change avoids the need for binding agreements and complex international negotiations between countries with differing priorities.”
Webster believes that insurers should collect a levy from energy companies based on the carbon intensity of their products, then use the funds for low-carbon energy projects.
“Like a carbon or energy tax, it would have the advantage that the revenues go solely into adaptation and mitigation, not government or individual spending,” he wrote in a paper with research director Richard Clarke, who works for carbon-pricing start-up Predict Ability. “Governments could legislate that it must be paid, as the UK has done with Flood Re.”
The pair are hoping to put forward their proposals at the Baden-Baden Reinsurance Congress next month, Clarke told The Telegraph, adding that they will make their argument to individual insurance companies, as well as international organisations such as the Association of British Insurers in the coming months.
“There is a gap, a need that these insurers could fill, and we’re trying to move this forward,” he said. “There are some things [insurers are doing] but not enough – it’s a conservative industry. Climate change is happening.”
The sector is well aware it needs to be seen as taking a lead, if only to save itself from future losses, but one of the challenges it faces is coming up with ideas that reduce risk rather than merely responding to natural disasters.
Flooding following Hurricane Harvey Credit: AP Photo/David J. Phillip
With scientists warning that climate change is worsening, insurance chief executives will be under increasing pressure to come up with products or investments that could actively delay its impact. Some examples exist, which could be built on. Aviva, for example, launched a “pay-as-you-drive” scheme a number of years ago with the aim of reducing CO2 emissions, while Lloyd’s has suggested that insurers invest in coral reefs and mangroves to dampen the impact of coastal storms after finding that coastal habitats absorb wave energy and so act as a natural defence, therefore reducing the amount insurers pay out in claims.
“We’ve got to do it right,” said Maurice Tulloch, Aviva’s chairman of global general insurance and chairman of ClimateWise, an industry group that drives research on climate risk. “The frequency of more severe events has been increasing year on year. I’m no longer having to convince people when I speak to them that we’re going to see more of these. As an industry we’ve got a role to play, we have to act now.”
But as insurers around the world ramp up efforts to adapt and manage risks, the list of tasks they face is endless. The full impact of Irma and Harvey will be unclear for some time, and the sector is under pressure to make sure that those in developing economies, who do not have insurance cover, are protected, with countries around the equator most vulnerable to extreme weather disasters.
“We need to look at ways of paying for natural disasters in less developed parts of the world, which also happen to be the areas that are most exposed to the worst effects of climate change,” Lloyd’s chief Beale has urged, flagging an issue that is becoming more important as storms and droughts grow fiercer and more frequent. Looking to the future, she said insurance firms cannot do it alone – they will need partnerships with governments, each other and even policyholders themselves to slow the impact of global warming.
“No one industry sector or government can do it themselves, progress is dependent on everyone working together,” she said. “The insurance industry takes the issue of climate change very seriously, because it knows all too well the damage it can cause.”
Graph included in the printed article, but not online
It is hard to know where to start with this pile of drivel.
One commenter has rightly complained about the misleading use of the Munich Re graph:
Let’s look at some of the other fake claims:
Floods like the one caused by Hurricane Harvey are supposed to happen once every 500 years. But Houston has seen three in three years, with Harvey being the most powerful hurricane to hit Texas in half a century
As we know, the history of Houston is littered with floods every bit as bad as this year’s. And Texas had two storms every bit as intense as Harvey in 1978 and 1979.
with Harvey being the most powerful hurricane to hit Texas in half a century
Harvey came ashore with winds of 130 mph, which made it the strongest since Hurricane Carla in 1961. However, Carla was a different beast entirely, with winds of 175 mph.
Prior to Carla, other Cat 4 hurricanes hit Texas in 1886, 1900,1915,1916 and 1932. These included two of the worst US hurricanes on record, Indianola in 1886, and Galveston in 1900.
The fact that Harvey is the most powerful to hit Texas in half a century is testament to the fact that such storms are becoming less frequent, and not that Harvey was unusually strong.
Meanwhile, Irma, which wrought devastation with sustained winds of 185mph, is one of the strongest storms ever recorded.
Since monitoring by satellites began in the 1970s, there have been four storms of 185 mph and more. In other words, an average of about one every decade. There is therefore nothing unusual at all about Irma.
Prior to satellite monitoring, there was very little data available for mid Atlantic storms, until they approached land.
Scientists say the scale of the destruction was exacerbated by climate change, and insurers are coming under pressure to do more to help limit the damage as the world prepares for extreme weather to become the new norm
Sheer drivel.
“Scientists say” is one of the usual copouts for lazy, incompetent journalists. If hurricanes really were exacerbated by climate change, we would see the evidence, which we don’t.
As for “extreme weather” to become the norm, even the worst junk scientists don’t claim this.
The average number of Category 4 storms per year has already more than doubled since 1900.
Below is the NOAA chart for Atlantic hurricanes, and it shows that reported major hurricanes have indeed become more common.
But, as already noted, we have only been monitoring them by satellites since the 1970s. Monitoring by hurricane hunter aircraft began in 1944, and even then planes often did not fly into the centre of the strongest storms, which as a consequence were underestimated.
Prior to 1945, there was little to rely on other than ships, which again would stay clear of storms where possible.
To make comparisons of today’s storms with those of the early 20thC shows naivety of the highest order.
Yet, even allowing for these factors, when we take a closer look at the NOAA data, we find that major hurricanes in the Atlantic were just as common in the 1950s and 60s as now. This cyclical pattern we see is connected with the AMO.
It is worth taking particular note of the apparent jump around 1950. This correlates closely with those hurricane hunter aircraft.
The only meaningful way we have of identifying long term trends is to look at landfalling hurricanes.
As far as the US is concerned, the worst decade was the 1940s, and, until Harvey arrived, we have just gone more than 11 years without one, the longest period on record.
The rest of the article is little more than advertising space for insurance companies to tell us how wonderful they are. The same insurance companies, of course, who have a vested interest in persuading us that climate change is making the weather worse.
And who might benefit from their solutions? Why the insurers themselves!
Webster believes that insurers should collect a levy from energy companies based on the carbon intensity of their products, then use the funds for low-carbon energy projects.
“Like a carbon or energy tax, it would have the advantage that the revenues go solely into adaptation and mitigation, not government or individual spending,” he wrote in a paper with research director Richard Clarke, who works for carbon-pricing start-up Predict Ability. “Governments could legislate that it must be paid, as the UK has done with Flood Re.”
So energy consumers will have to pay a premium to the insurance companies! What’s not to like?
For a balanced view on weather related disasters, we only have to look at what Roger Pielke Jr has to say:
https://twitter.com/RogerPielkeJr/status/684740869707071488
I’ve given up expecting any proper journalism from the MSM these days, but this load of old tosh from Lucy Burton must rank up there with some of the worst.
FOOTNOTE
Judging by Munich Re’s accounts, all of these “extreme weather disasters” don’t seem to be making much of a dent in their profits!
via NOT A LOT OF PEOPLE KNOW THAT
September 18, 2017 at 09:03AM
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