This chart from the article in the url below is interesting. It tracks insurance payouts over the past century for the insurance industry:
"When it comes to climate impacts, the frontline of the finance industry is insurance. Last year's payout from damages caused by extreme-weather events totaled $120 billion—about the same as the economic output of Kenya. And that's a 50% increase over the previous decade's average."
See if you can spot the moment when insurance claims went through the roof:
Apart from the obvious irony that "man-made" events are remaining steady, while "weather related" and "natural catastrophes" are increasing (even though climate change is "man-made"), the change since the late 1980s (and even more so, since 2000) is dramatic. In response, the insurance industry clearly needs to raise its premiums to discourage the kind of behavior (e.g., living in areas that are below sea level) that can lead to catastrophic payouts:
"'Our pricing signal should imply that you have to change your behavior,' said Christian Mumenthaler, group chief executive officer of Swiss Re. … 'But human beings generally don't like to change their behavior.'"
In addition to humans being irrational (who would have thought?), the government has a habit of stepping in when natural disasters occur, which further reduces the likelihood of prohibitive costs forcing changes in behavior. The result is that we get to keep repeating the same mistakes, only with the stakes getting higher as the consequences of climate change become more severe.
Take care
David
David Chandler
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Climate is Forcing the Risk-Aware Industry to Reinvent Itself
By Akshat Rathi
January 24, 2023
Bloomberg
