While 2020 was a historic year for both hurricanes and wildfires, insurance companies found themselves with surprisingly low bills from natural disasters as many of the storms hit areas of lower population density, missing the major cities around them, according to an article in Scientific American. However, many insurance companies still found themselves under pressure, with events like the winter storm that shut down much of Texas leading to major losses, forcing some companies to turn to their reinsurance coverage.
Members of the Swiss Re Institute, a company that offers reinsurance coverage to insurance companies, have talked about the threats posed by the continued growth of extreme weather events, and their relation to climate change. Speaking to Scientific American, Thomas Holzheu, chief economist for the Americas, and Erdem Karaca, head of catastrophic perils for the Americas, offered some insights into how the company is considering climate science in their policies and coverage. Key points of discussion included population shifts that have led more people to living in threatened area, the challenges of accurate pricing of policies in unstable environments, and the difficulty of dealing with local areas versus broader regions.
Says Holzheu of the importance of climate science, “Climate change is not abstract. In the statistics we handle for the company and the industry, we see that climate change is already here. It’s very much keeping us busy in trying to understand it.”
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