U.S. insurers may start feeling the heat on climate change mitigation

March 2, 2015 1:56 PM

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U.S. insurers may start feeling the heat on climate change mitigation

Industry efforts to quantify and limit the impact of climate change will likely proliferate over the next few years, although not necessarily on a voluntary basis. Carriers can expect heightened scrutiny and more data calls from overseers evaluating how the phenomenon is being accounted for in underwriting and pricing models, reserving decisions, investment policies, and business continuity planning. These considerations could fit neatly into broader enterprise risk management transformations.

However, beyond any mandatory compliance responsibilities, the likelihood of increasing frequency and severity of climate-related disaster losses should motivate insurers to voluntarily expand their research efforts into how climate change may be disrupting the communities they serve and raising the...

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