30 Apr US warned to prepare for climate change- Insurance companies
Large insurance companies, consumer groups and environmental advocates are strongly urging the United States Government to revise its disaster policies given the increasing frequency of extreme weather events linked to human induced climate change. A report by the SmarterSafer coalition highlighted that the Government needs to increase its expenditure on pre-disaster mitigation efforts and infrastructure protection which will reduce the clean up expenditure following disasters. The SmarterSafer coalition consists of some of the world’s largest insurance companies including Allianz, Liberty Mutual and SwissRe.
States that are hit by disasters like extreme floods or fires rely too heavily on assistance from the Federal Emergency Management Agency (FEMA), according to the SmarterSafer report. When the assistance is provided, more than 75% of the costs are borne by the Federal Government. Rising sea levels is one of the biggest climate risks, and the frequency and length of minor coastal flooding (called nuisance flooding) has increased along the Atlantic, Gulf and West Coasts from less than once per year in the 1950s to almost quarterly. According to the National Climate Assessment, very heavy rainfall periods have also increased in frequency in every region of the United States except Hawaii since 1958, with the Northeast (71%) and Midwest regions (37%) seeing the most significant increases respectively.
Statistics such as these are red flags for insurance companies whose business is largely based on credible risk estimation.