Global Warming Panel in Boston Raises Key Issues
Risk and Insurance Implications Highlighted
At a panel discussion November 16 at the World Trade Center in Boston, experts in the field discussed climate change, its impact on specific weather events, implications for personal and business risk, and its effect on property and D&O insurance coverage and markets. The program was sponsored by the Boston Chapter of the CPCU Society.
Panelists were:
- Sergio Prete, VP and Manager, Catastrophe Exposures, FM Global
- Michael Goetz, Risk Analysis Branch Chief, Region 1, FEMA
- Karen Clark, Founder of AIR Worldwide and Principal, Karen Clark & Co
- Andrew Logan, Director Oil and Insurance Programs, Ceres
- The moderator was Robert Mansfield, Sr. VP, HUB International Brewer & Lord.
Some of the major points arising out of the session were:
- Flood maps in use by FEMA currently are being revised, but until the program is completed (several years from now) the zones delineated cannot be relied on for accuracy. It makes sense, then, to be very conservative in considering flood exposure.
- Insurers are focusing on windstorm exposure and taking measures to reduce their risk such as pulling out of coastal areas. However, the global warming effect is much broader than just a windstorm phenomenon, encompassing draught, flooding, wildfires, etc. In the words of one presenter “You can exclude yourself out of business.”
- The paucity of hurricanes in the last two seasons cannot be taken as a rebuttal to the global warming theory. The loss amount in those seasons is more a function of where the hurricanes hit rather than their frequency or severity. Also, the trend, like almost all trends, is not a straight line, but rather zig zags while still heading in an upward direction long term.
- Weather related losses can be prevented. Many pictorial examples were presented indicating the very real effect of engineering as a tool to reduce or eliminate loss.
Principals of Licata Kelleher, as officers and board members of the CPCU Society, were instrumental in organizing this program.
Nov 27, 2007
