Learning around the world - Key Issues for Insurance

Lloyd's of London is taking note of the "volatility of the climate."

Lloyd's has identified key issus for the insurance industry -- and of course, the remainder of business...and individuals.

• Too little but not yet too late. The insurance industry must do more now to understand and actively manage climate change risk.
  Outreach opportunities...
  
  
• Recent events have shown capital and pricing models to be wanting. We must regularly update and recalibrate our models to keep pace with reality.
  Natural capitalism concepts come to mind here...
  
  
• Windstorm trends will put particular pressures on businesses and their insurers.
  Maybe we need to live and work away from critical environmental locations...and live more lightly on the land...
  
  
• Climate change means exposures are changing and new ones emerging. Insurers must regularly review and communicate conditions of coverage.
  Watch for rising rates...
  
• Insurers must prepare for the impact of climate change on asset values. Underwriting for profit will be key.
  Again watch for rising rates...and hopefully some controls on high risk business practices.
  
• Effective partnership with business and government will be key to managing risk. The insurance industry must engage now.
  Hmmm, an organic system...one in which profit isn't the primary motivator?
  
  

Insurance has become the most convenient excuse for misbehavior. The old saying "If you can pay the fine, commit the crime"...or some such, seems to apply. The question is, will we remove insurance as a primary contributor to environmentally damaging behaviors?

It makes sense that to remove the bad behavior, we need to remove the excuses....and the enabling tools such as liberal insurance policies.