Climate change could make insurance too expensive for most people – report

(The Guardian, 21 Mar 2019) Munich Re, world’s largest reinsurance firm, warns premium rises could become social issue.

Insurers have warned that climate change could make cover for ordinary people unaffordable after the world’s largest reinsurance firm blamed global warming for $24bn (£18bn) of losses in the Californian wildfires.

Ernst Rauch, Munich Re’s chief climatologist, told the Guardian that the costs could soon be widely felt, with premium rises already under discussion with clients holding asset concentrations in vulnerable parts of the state.

“If the risk from wildfires, flooding, storms or hail is increasing then the only sustainable option we have is to adjust our risk prices accordingly. In the long run it might become a social issue,” he said after Munich Re published a report into climate change’s impact on wildfires. “Affordability is so critical [because] some people on low and average incomes in some regions will no longer be able to buy insurance.”

The lion’s share of California’s 20 worst forest blazes since the 1930s have occurred this millennium, in years characterised by abnormally high summer temperatures and “exceptional dryness” between May and October, according to a new analysis by Munich Re.

Wetter and more humid winters spurred new forest growth which became tinder dry in heatwave conditions that preceded the wildfires, the report’s authors said.

After comparing observational data spanning several decades with climate models, the report concluded that the wildfires, which killed 85 people, were “broadly consistent with climate change”.

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The Guardian, 21 Mar 2019: Climate change could make insurance too expensive for most people – report