Lacking precise climate models, insurers assume the worst

 

Insurers need more accurate climate information to confidently assess risks associated with rising seas and stronger storms, industry officials told climate scientists in a two-day conference here last week. Current models offer imprecise predictions and are too broad geographically, making insurers uncertain of the outcomes associated with climate change along specific coastlines and to exact communities. That uncertainty can lead to less coverage along high risk areas and to rising premiums, according to people who attended the event.

If, for example, a scientific study predicts a wide range for the number of feet that seas could rise, insurers will assume the worst. That's bad for customers. And it could mean that the government takes on greater portions of the cleanup cost after damaging hurricanes. "We've been very concerned with the time scale and the scale with which sea level could rise," said Richard Thomas, the chief underwriting officer for American International Group, one of the world's largest insurance companies.

There's uncertainty among scientists and insurers about the rate at which ice sheets in Greenland and Antarctica are melting. That could mean larger storm surges damage more property than before, Thomas said. "We would like to know if the change in climate will cause more storms [or] fewer storms," he added. "There's a tremendous amount of work to be done."