When one thinks of those trying to spread the word about the risks of global warming to society, one of the most reputedly staid industries probably does not leap to mind. Global reinsurer Swiss Re is looking to change that. Having long had its eye on climate change, the company cosponsored a major report, released in late 2005, high lighting the potentially disastrous economic consequences of global warming. The report notes: “Insurers and reinsurers find themselves on the front lines of this challenge since the very viability of their industry rests on the proper appreciation of risk.”
Climate change poses a special problem for the industry because it could dramatically change the rates of extreme weather events, perhaps to a point where insurers would be unable to keep up. The report, co-sponsored by the United Nations Development Program and published jointly with the Center for Health and the Global Environment at Harvard Medical School, outlines recent trends in climate and severe weather and traces the possible effects of two different climate change scenarios on prospects for heat waves and flooding, infectious and chronic disease, and managed and natural resources. Both scenarios are based on unchecked greenhouse gas emissions.
Swiss Re has a history of sensitivity to climate change concerns. In 2003 the insurer announced it was establishing a 10-year plan to become greenhouse “neutral,” meaning it would reduce or offset the net carbon emissions of its employees to zero.
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Last year the company joined the Chicago Climate Exchange, a voluntary market for greenhouse gas emissions trading. With the release of its 2005 report, Swiss Re called on governments and global industry to take much stronger action to mitigate the consequences of climate change: “[L]ittle action has been taken by most governments or businesses to address the potential costs of climate change. As all insurers know, however, risk does not compliantly bow to the political or business agenda.”