Lloyd’s of London Latest Insurer to Warn on Warming, Mocks Deniers

October 16, 2013

I’ve made the point often.  If you want to know if climate change is real, check with the people who actually have money on the table, skin in the game – the big insurance companies. These folks have more money than God, (almost as much as Exxon) and hire the smartest number crunchers in the world to assess their risk exposure.  They are factoring in climate change, and pricing their coverage accordingly . As Eli Lehrer points out below, if they don’t get it right, someone will come in, undercut them,  and eat their lunch.

Munich Re, the big euro re-insurer, has had climate on the radar since the early 1970s.

From a powerpoint by Munich Re’s Peter Hoeppe. Munich Re publication from 1973 warning of impacts of extreme events due to climate change.


The head of exposure management at leading insurer Lloyd’s has slammed attempts to dismiss the latest UN climate science report, and says he’s unconvinced by claims the world is cooling.

“The sceptics are just trying to push the debate and they start at 1998, which was one of the hottest years on record,” says Trevor Maynard in a blog titled ‘Silencing the Sceptics‘.

“It’s a bit like someone breaks the world record for running 100 metres and then in the next ten races people say, ‘Runners are getting slower’.”

He added:  “In some parts of the world we expect there will be more flooding and drought and food shortages, we just don’t know where exactly. It means all regions need to think about becoming more resilient.”

Eli Lehrer, of the Conservative R Street think tank:

Indeed, if free-market conservatives really want evidence of climate change, they ought to look towards the insurance markets that would bear much of the cost of catastrophic climate change. All three of the major insurance modeling firms and every global insurance company incorporate human-caused climate change into their projections of current and future weather patterns. The big business that has the most to lose from climate change, and that would reap the biggest rewards if it were somehow solved tomorrow, has universally decided that climate change is a real problem. An insurance company that ignored climate change predictions could, in the short term, make a lot of money by underpricing its competition on a wide range of products. Not a single firm has done this.

NYTimes – Flood Insurance Costs Rise:

MIAMI — Sharp increases in federal flood insurance rates are distressing coastal homeowners from Hawaii to New England and are starting to hurt property values and housing sales in areas just beginning to recover from the recession, according to residents and legislators.

In recent weeks, the hefty flood insurance rate increases brought about by a 2012 law have stoked widespread alarm and uncertainty, prompting rallies, petitions and concern among state governors.Mississippi has sued the federal government to try to block the law. The issue has even garnered the attention of lawmakers, otherwise mired in the acrimonious government shutdown. A bipartisan group of senators and House members from Gulf Coast states are pressing for significant adjustments to the law once the Capitol returns to normal.

The law, officially known as the Biggert-Waters Flood Insurance Reform Act, is being rolled out in stages, with a major part having gone into effect on Oct 1. It removes subsidies that keep federal flood insurance premiums artificially low for more than a million policy holders around the country — a discount that was applied to properties that existed before the drawing of flood insurance rate maps.

An estimated 20 percent of the property owners with federal flood insurance received these subsidies as the new law went into effect, and their premiums will rise, in some cases precipitously, either now, over the next several years or whenever they sell their properties. The exact amount of the increase depends on the home’s elevation above flood level.

Rising Sea level eats away at Miami beaches

Jeff Goodell in Rolling Stone – “Goodbye Miami”:

iami is the most connected city in America, a place where the entire economy is geared toward the next big banking deal, real-estate deal, drug deal. As Wayne Pathman, a land-use attorney in Miami, put it to me, “The biggest question for the future of Miami is how investors will react when they understand the risks of sea-level rise.” The rivers of cash that are flowing into the city right now are pretty clear evidence that few investors are worried about that risk. Brickell, the hot new neighborhood where the $1 billion Brickell CityCentre, one of the biggest new developments in the city, is currently under construction, is a few blocks from the water – streets are already nearly impassable during big storms. “It’s partly denial and ignorance, and partly a feeling that they can beat the odds,” says Tony Cho, the president of Metro1 Properties Inc., a large real-estate firm in Miami.

One thing that may change that is insurance rates. After Hurricane Andrew hit in 1992, many large insurers stopped offering property coverage in the state, citing the high risks of hurricane insurance. That left Florida in a dangerous position, with only small regional insurers to underwrite storm coverage for homeowners. But in the event of a large storm, the small insurers don’t have sufficient capital to cover the claims they would receive. To remedy the situation, the state began offering its own low-cost insurance under the name Citizens Property Insurance Corporation, which has become the largest insurer in the state. By subsidizing insurance, lawmakers hoped to keep costs down and development booming. The problem is, Florida is now on the hook for billions of dollars. “A single big storm could bankrupt the state,” says Eli Lehrer, an insurance expert and president of the R Street Institute, a conservative think tank in Washington, D.C.

Flood insurance is likely to skyrocket, too. The National Flood Insurance Program is currently more than $20 billion in debt, thanks to payouts related to Hurricane Sandy and other extreme-weather events. In 2012, Congress passed the Flood Insurance Reform Act, which jacks the price of insurance up for people living in known flood zones. More reforms of this sort are sure to come. For a place like Miami, where virtually the entire city is a flood zone, the economic costs could be in the hundreds of billions.

The financial catastrophe could play out like this: As insurance rates climb, fewer are able to afford homes. Housing prices fall, which slows development, which decreases the tax base, which makes cities and towns even less able to afford the infrastructure upgrades necessary to adapt to rising seas. The spiral continues downward. Beaches deteriorate, hotels sit empty, restaurants close. Because Miami’s largest economies are development and tourism, it’s a deadly tailspin. The threat of sea-level rise bankrupts the state even before it is wiped out by a killer storm.


72 Responses to “Lloyd’s of London Latest Insurer to Warn on Warming, Mocks Deniers”

  1. omnologos Says:

    Driving through Europe today and tomorrow then a few days off the net. Thanks for the surreal experience, as am apparently berated as humorless by people who can’t get the humor behind the Argumentum ad Providentiam.

    I should pay you guys for the entertainment.

    • dumboldguy Says:

      So now you want us to think that you’re a “humorist”, O-Log? I for one greatly resent people who play games and make jokes at other people’s expense and then whine and protest that they were “just trying to be funny” when they get called out for it. I think virtually EVERYONE else that visits this site wants to have a serious dialogue about climate change, share info and insights, and learn from each other. I do, and YOU get in the way of all of us who want to do that.

      You don’t seem like a stupid person—-what personality disorder drives you to use your intelligence in such a negative way? (The telepsychiatry answer would lead us to NPD and its related intellectual onanism).

      As for your website and the AaP, I share Martin L’s feelings about the AaP. and “Mike’s” about the site, except that I don’t find it as funny as Mike does and you apparently do also. I went through it all, and I, like Mike, said “this guy has got to be kidding—he’s spoofing us”. To wit, some excerpts from Mike—posted on the Omnologos site “10 months ago):


      I love your site dude……Just your CV is a scream! Monty Python would have bowed to you as Pure Genius. I’ve actually sent a link to John Cleese – he’ll appreciate it.

      I’d love to know what proportion of visitors actually think you’re for real – I guess it’s very hard to gather those figures. It’s so clever because you know just how much tech-FUD to insert to make it all plausible to non-technical people – a rare skill.

      Anyway, thanks so much, and keep it up – we need a good laugh in these difficult times.


      Enjoy your drive, O-log. When you return, may I suggest that you confine your attempts at “humor” to your personal website and leave this site to those of us who are adults?

  2. omnologos Says:

    Dumboldguy – am no humorist any more than I’m a driver just because I drive my car. Sometimes I write humorous stuff.

    Imnsho the spoof of the AaP was self evident. Then I’ve discovered some people were too militant in their warmism to “get it”.

    Anyway if one has any sense of humor , the only response after discovering one’s been spoofed is a big laugh. “Mike” is instead puerile in his attempt at humoring back (too much sore blood obviously).. Humor is always about carefully balancing hate and love for its subject. There’s a wonderful scene in a circus movie with Jerry Lewis when a little girl denounces out loud when a clown crosses the line and shows only unfunny hate. I doubt “Mike” would get any of that either.

    • dumboldguy Says:

      I detect a small change in O-Log’s tone in the several short comments he has just posted. For instance, he has referred to me here by my chosen handle (dumboldguy), rather than the just plain “dumb” that he used in an earlier post. I also see few insults and only a little bombast in these comments. O-Log appears to be trying and I encourage him to continue.

      However, he does suffer another logic fail here by totally missing my overall point. Perhaps I wasn’t clear enough?

      O-Log, a number of us have posted things that might be considered humorous, ironic, or satirical. They have always been rather obviously so, and have been mainly delivered as asides to enrich and enliven the dialogue. We may have taken some small satisfaction from doing that (i.e., privately patted ourselves on the back for being “clever”), but we have not tried to derive self satisfaction from delivering a sustained so-called “spoof” that gives the appearance of a denier and thereby pollutes the dialogue with confusion and distraction.

      This site and the topic of climate change is not the place for “spoofing” and “hidden humor” that is funny only to the author. Mike was no more peurile in his “backatcha” than you were originally—he WAS open and honest, though, and your response to him was rather weak and unconvincing, just like this reply to me is—“the only response after discovering one’s being spoofed is a big laugh”.
      I told you my “crap detectors” wiggled early on when reading your stuff—they are very good ones, developed in a long career that involved sorting out much crap from truth. You never fooled me, and the only “discovery” I made was that I greatly resented your arrogance. Again, I say take your “humor” off to your private website and join the rest of us here as a serious contributor.

      Or are you really a paid troll for the fossil fuel interests and Crock is your assigned work station? Not to be paranoid, but my crap detectors have made me believe that there are many such paid deniers on many of the less technical blogs and the political blogs—they are there to push FUD and confuse the general public, and they have been quite successful. If you ARE a paid troll, you ought to ask for reassignment, because you’re making little progress with us.

      PS If I want “humorous spoofing”, I go to the Onion. They’re way better at it than you are.

      • omnologos Says:

        You can thank Peter for the change of tone. Now if you only had any idea what I spoofed and why.

        Nevermind – reading and commenting my posts ain’t mandatory (yet). Go read something else and please stop trying to divert the discussion towards “me”.

        • dumboldguy Says:

          I said “a small change of tone”—it was quite small, but I was trying to encourage O-Log to improve, so I did mention what I perceived.

          Apparently there has been no real change in attitude or any increase in self awareness on O-log’s part, because he is back again polluting the dialogue with messages that are all about “him”. He once again displays his egomania and narcissism by arrogantly dismissing my comments on what he called “spoofing”.

          I will be glad to stop talking about your “me” problem, O-Log. It will happen when YOU stop posting messages like this that have NOTHING to do with the topic under discussion, but merely demonstrate that our previous “telepsychiatry” efforts were right on the mark.

          • dumboldguy Says:

            SBAT? O-Look-At-Me (my new handle for Omnologos–OLAM for short) has now “abandoned discussion”—a debate term for giving up because you have been beaten and have no cogent arguments to make, so you blather and dither instead. And of course, as he abandons discussion, he must try to turn it around and accuse those of us who dare to question him of being trolls with his feeble “SBAT”.

            That might work if OLAM were visiting a site where he had other trolls to support him, but he appears to be very much alone here. Perhaps he should take a look at his “thumbs up-thumbs down” tally for some objective proof of that assertion?

            A quick count of OLAM’s ratings on his 13 comments on this thread shows a total of ONE thumbs up and NINETY-TWO thumbs down, including one comment with an astronomical 22 “downs”. Those of us who have pointed out OLAM’s errors of fact or logic have consistently gotten multiple thumbs up for doing so. I predict that OLAM will continue to be the site’s leader in thumbs down ratings—will he notice?

            SBAN, OLAM. (and the N is for Narcissist)

  3. jpcowdrey Says:

    Joke pertinent to this discussion:

    “On the internet, no one knows if you are dog. OTOH, everyone knows if you are being a jackass.”

    Funny, right?

    Except, perhaps, to the person being a jackass.

  4. ohgeewhiz Says:

    The insurance companies make the most money when they go with the fear, to jack up the cost, knowing it’s highly unlikely they will lose. Thus the alarmists are helping the insurance co’s making money.
    2) The 1998 hottest….The analogy would be more like a doctor saying take this drug and you will run faster. Then the doc gives everyone even more drugs for 15 years but nothing….. all the ipcc computer models are wrong.
    The more wrong—the more sure!!! 90—-95%
    What else has twisted logic like this?
    The religion of AGW has left the religious status and entered cult status.
    Ask Al Gore how afraid he is in his newer ocean level multimillion dollar house, that he bought with his alarmist money machine.
    Follow the money….follow the political power……watch the followers…..
    They originators knew who would follow a highly emotional propaganda machine. They hijacked what was once a good cause and ruined it. They are using all of us. When something truly real is on the horizon……who will believe them

  5. ohgeewhiz Says:

    @ Stephen Paré wrote………..
    …….”ohgeewhiz – you’re wasting your time.”

    • dumboldguy Says:

      Stephen can speak for himself, but I agreed with his comment, so I will put in my two cents about “because….”.

      Because anyone who says things on this site like……

      “The religion of AGW has left the religious status and entered cult status”

      “Al Gore” (followed by almost anything).

      “The originators knew who would follow a highly emotional propaganda machine. They hijacked what was once a good cause and ruined it. They are using all of us”.

      …….IS wasting their time, as well as ours.

      (Assuming you WERE serious and not just cleverly “spoofing” us as some others are wont to do)

  6. ohgeewhiz Says:

    Looking at the ten or so comments on this page, I see nothing about global warming, and everything about personal attacks.
    My post was sincere AND on topic…..if that is still available. if not fine you can all have your fun

  7. ohgeewhiz Says:

    However…In the spirit of what passes as science, and the mixing of correlation, and causation…..I do have—BREAKING NEWS!! —
    The true link to global warming is leaked in this single chart. It is infinitely closer in correlation than co2.

    My job is done here.

  8. […] Re, Swiss Re and the other reinsurers, along with the Lloyd’s of London insurance market (unrelated to the bank of the same name), stand out from the rest of the business […]

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