Page 40 - Insurance Times November 2023

storms, taxpayer bailouts for corporate farms are growing worsening forest fires across the western US. A peer-
exponentially as climate change damages crops, observes reviewed study from the Union of Concerned Scientists
environmentalist Tim Goncharoff. found that 19.8 million acres of burned forest land – 37% of
the total area scorched by forest fires in the western US and
Georgina Gustin of Inside Climate News reports: “The southwestern Canada since 1986 – can be attributed to
country’s farmers took in a record $19bn in insurance heat-trapping emissions traced to the world’s 88 largest
payments in 2022, many because of weather-related fossil fuel producers and cement manufacturers.
disasters, according to a new analysis that suggests climate
change could stoke the cost of insuring the nation’s farmers Emissions from these companies and their products also
and ranchers to unsustainable levels.” contributed to nearly half of the increase in drought- and
fire-danger conditions across the region since 1901. The
Critics of the programme, she says, worry that it will study – and other attribution studies like it – offers
incentivise more carbon-intensive farming. Already, US policymakers, elected officials and legal experts a scientific
farms are responsible for 11% of the country’s greenhouse basis for holding fossil fuel companies accountable for the
gas emissions. A recent analysis suggests that percentage impacts of their products and their decades-long deception
could rise to about 30% of the total by 2050 – more than efforts.
any other sector of the economy – if farms and ranches
don’t shrink their carbon impact. Rather than making legitimate changes to their products
and processes, some of these businesses have relied on
Protection gap exaggerated, misleading or false claims about their
environmental, social and governance credentials. “But how
“American households are already seeing the impacts even
many of these can withstand scrutiny from regulators,
if their own homes have not been damaged,” said Treasury
Secretary Janet Yellen recently. “As a result, more activist groups or opportunistic customers?” asks Reuters.
households are turning to residual markets for coverage or
are foregoing insurance entirely.” In 2020, Yellen added, just This is a story that spans from bedrooms to boardrooms and
60% of the $165bn in total economic losses from climate- into the global arena. The heads of Europe’s largest insurers
have warned that a growing political backlash in the US has
related disasters were covered by insurance. She believes it
is necessary for the Financial Stability Oversight Council to jeopardised their ability to join forces to combat climate
examine how these shifts may affect the wider financial change, writes Ian Smith for the Financial Times.
system.
As the pendulum swings from homes to responsible boards,
Wildfires are the fastest-growing natural disaster risk, to finger pointing for the dissolution of the Net-Zero
reports First Street. During the next 30 years, it estimates Insurance Alliance, the climate change debate ‘wildfire’ is
the number of acres burned will balloon from about four all set to intensify in the US.
million per year to nine million, and the number of structures
destroyed is on track to double to 34,000 annually. Wildfires Courtesy: The article has been reproduced with the
are also the predominant threat for 4.4 million of the 39 permission of Mr. Praveen Gupta. The article was contributed
million properties that First Street identified as at risk of by Mr Gupta for the blog of Chartered Insurance Institute
insurance upheaval. Journal, UK. Link https://www.linkedin.com/posts/
praveenguptafcii_from-boardrooms-to-bedrooms-activity-
Proximate cause 7115514986457686016-GNgl?utm_source=share&utm_
Coal, oil and gas companies are now directly linked to medium=member_android. T

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36 November 2023 The Insurance Times