Investment implications of Climate Change

[basilio]

Insurance was all ways going to be the reality check when measuring risk

Yeah. Quite right. In fact it was the Re Insurance companies which first highlighted the reality and dangers of global warming.

 

[basilio]

The flood of local fire/flood insurance claims across Australia has resulted in stretching many people to breaking point.We have yet to see the world wide fallout of the current extreme weather events in US, China, Europe and elsewhere

Rachel's home insurance payments increased by $840 this year. She's just one Australian sharing the cost of more claims

One in 25 Australians have lodged an insurance claim because of extreme weather since 2020, but should the remaining policyholders be responsible for sharing the cost of increased premiums?

www.abc.net.au

Insurance affordability stress hits hard for one in eight Australian households

Kim Robertson has received notice that her home and contents premium has jumped by 142 per cent, mirroring the steep rises in regions exposed to natural perils such as cyclone and flood.

www.abc.net.au

 

[basilio]

This proposition is a very creative approach to tackling multiple problems.

WHAT IF ... the 1.2 million new homes proposed for construction in the next 5 years were models of carbon reduction practices and technology ? If each home actually took carbon from the air, produced renewable energy and minimised GG ouputs ?
How valuable would that be to our industrial skill sets ? How significant in reducing peoples cost of living ? And on top of that haviong a massive impact on GG emissions .

Better than net zero? Making the promised 1.2 million homes climate-friendly would transform construction in Australia

Published: August 23, 2023 6.05am AEST

Authors​

1. Jason Alexandra
   Senior Research Fellow, Institute for Climate, Energy and Disaster Solutions, Australian National University
2. Kate Lawrence
   Climate Program Manager, Institute of Climate, Energy and Disaster Solutions, Australian National University
3. Mark Howden
   Director, ANU Institute for Climate, Energy and Disaster Solutions, Australian National University

Disclosure statement​

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

Partners​

Australian National University provides funding as a member of The Conversation AU.


The national cabinet has announced plans to build an extra 1.2 million homes by July 1 2029. The construction, operation and maintenance of buildings accounts for almost a quarter of greenhouse gas emissions in Australia. If these new homes are built in a business-as-usual fashion, they will significantly increase national greenhouse gas emissions.

What if we committed to building homes that produced net negative emissions? Put simply, such buildings remove more carbon dioxide (CO₂) from the atmosphere than are emitted during their lifecycle. This includes emissions from producing building materials and construction through to the end of building life and demolition.

Building net-negative-emissions homes can be done. Examples have already been built overseas.

Building these homes in Australia would do much more than reduce national emissions. It would be a tangible symbol of our commitment to integrated problem-solving, in this case involving both housing and a climate-friendly future. We could produce houses that are part of the climate solution, not a big part of the problem.

Better than net zero? Making the promised 1.2 million homes climate-friendly would transform construction in Australia

We can construct buildings that reduce atmospheric CO₂ by more than their lifetime emissions. They now don’t cost much more – and a project involving 1.2 million homes would drive costs down further.

theconversation.com

 

[mullokintyre]

Its just possible there is another take on all this.
Namely it gives the insurance companies an excuse to raise premiums so they can make more money.
But surely i hear you say, insurance companies really care about the planet, and would not just be interested in increasing prfits!.
Of course not.
mick

 

[divs4ever]

Its just possible there is another take on all this.
Namely it gives the insurance companies an excuse to raise premiums so they can make more money.
But surely i hear you say, insurance companies really care about the planet, and would not just be interested in increasing prfits!.
Of course not.
mick

bias warning i hold QBE , SUN and TWR

my experience with insurance companies , is they have been their own worst enemies , cutting corners in repairs in some cases costing them much more than complete demolish( and write/off ) and replacement

now maybe a rebate for home insulation being fitted ( solar generation has it's own flaws/costs ) , insulation cuts power demand at peak times ( mid-winter morning and mid-summer mid-days ) no moving/electronic parts to fail ( and don't forget the tried and tested double-glazing , the solutions exist we just lack the 'brains-trust ' to implement it intelligently

Rudd had the right concept but messed up with the implementation

 

[basilio]

The impact of extreme weather events turbo charged by global warming continues to undermine the Insurance industry. Check out the top 5 years of insurance costs in the table below

Hurricane Idalia could become 2023’s costliest climate disaster for the US​

Analysts estimate the category 3 storm has already racked up a preliminary cost of $9.36bn, straining the insurance industry

Richard Luscombe in Miami

@richlusc
Thu 31 Aug 2023 22.37 AESTFirst published on Thu 31 Aug 2023 20.00 AEST



Hurricane Idalia could become the costliest climate disaster to hit the US this year, analysts say, with massive implications for the insurance and risk management industries.
The category 3 storm that barreled into Florida’s west coast from the Gulf of Mexico on Wednesday, then carved a path of destruction and flooding through Georgia and the Carolinas, has a preliminary price tag between $9.36bn, based on early estimates, from risk analysts at UBS, and $18bn-$20bn calculated by AccuWeather.



What is a storm surge and what is the threat from Hurricane Idalia?

Read more
It follows 15 previous “individual weather and climate disasters” recorded in the US already this year by the National Oceanic and Atmospheric Administration (Noaa) as unprecedented heat, wildfires, storms and floods escalate.

Cumulatively, Noaa said that by the end of July, which Nasa said was Earth’s hottest month on record, the total estimated cost of the damage caused by the disasters was $39.7bn. That figure does not include the estimated $5.5bn cost to rebuild the town of Lahaina following devastating wildfires that razed the Hawaiian island of Maui this month.

“The costs are becoming unbearable,” said Tom Larsen, senior director of insurance solutions at CoreLogic, a property analytics provider that publishes an annual hurricane risk report.

“The business of insuring for catastrophes used to mean exceptional, very rare events and that’s not what we’re seeing. These are much more common, so something’s got to change.”

Larsen noted that Hurricane Idalia’s strike in a rural and lesser-populated area of Florida, with fewer insured structures, would keep its eventual cost below other major cyclones, such as Hurricane Ian that struck last year and left a $113bn trail of devastation.

But he is concerned about the possible impact on an already fragile insurance market in Florida, which has seen several large providers leave or go out of business in the last two years despite efforts by state lawmakers to make it a more welcoming environment.

Fewer providers means higher premiums to consumers, and the cost of reinsurance, which insurance companies purchase to limit their own exposure, has soared. That cost is also passed on to customers, further fueling the home insurance crisis.

Hurricane Idalia could become 2023’s costliest climate disaster for the US

Analysts estimate the category 3 storm has already racked up a preliminary cost of $9.36bn, straining the insurance industry

www.theguardian.com

 

[Sdajii]

The impact of extreme weather events turbo charged by global warming continues to undermine the Insurance industry. Check out the top 5 years of insurance costs in the table below

Hurricane Idalia could become 2023’s costliest climate disaster for the US​

Analysts estimate the category 3 storm has already racked up a preliminary cost of $9.36bn, straining the insurance industry

Richard Luscombe in Miami

@richlusc
Thu 31 Aug 2023 22.37 AESTFirst published on Thu 31 Aug 2023 20.00 AEST



Hurricane Idalia could become the costliest climate disaster to hit the US this year, analysts say, with massive implications for the insurance and risk management industries.
The category 3 storm that barreled into Florida’s west coast from the Gulf of Mexico on Wednesday, then carved a path of destruction and flooding through Georgia and the Carolinas, has a preliminary price tag between $9.36bn, based on early estimates, from risk analysts at UBS, and $18bn-$20bn calculated by AccuWeather.

View attachment 161849
What is a storm surge and what is the threat from Hurricane Idalia?
Read more
It follows 15 previous “individual weather and climate disasters” recorded in the US already this year by the National Oceanic and Atmospheric Administration (Noaa) as unprecedented heat, wildfires, storms and floods escalate.

Cumulatively, Noaa said that by the end of July, which Nasa said was Earth’s hottest month on record, the total estimated cost of the damage caused by the disasters was $39.7bn. That figure does not include the estimated $5.5bn cost to rebuild the town of Lahaina following devastating wildfires that razed the Hawaiian island of Maui this month.

“The costs are becoming unbearable,” said Tom Larsen, senior director of insurance solutions at CoreLogic, a property analytics provider that publishes an annual hurricane risk report.

“The business of insuring for catastrophes used to mean exceptional, very rare events and that’s not what we’re seeing. These are much more common, so something’s got to change.”

Larsen noted that Hurricane Idalia’s strike in a rural and lesser-populated area of Florida, with fewer insured structures, would keep its eventual cost below other major cyclones, such as Hurricane Ian that struck last year and left a $113bn trail of devastation.

But he is concerned about the possible impact on an already fragile insurance market in Florida, which has seen several large providers leave or go out of business in the last two years despite efforts by state lawmakers to make it a more welcoming environment.

Fewer providers means higher premiums to consumers, and the cost of reinsurance, which insurance companies purchase to limit their own exposure, has soared. That cost is also passed on to customers, further fueling the home insurance crisis.

Hurricane Idalia could become 2023’s costliest climate disaster for the US

Analysts estimate the category 3 storm has already racked up a preliminary cost of $9.36bn, straining the insurance industry

www.theguardian.com

View attachment 161848

Gee, more land is covered in infrastructure rather than wilderness every year, and inflation means the same amount of damage has a higher dollar figure than before in the same way I could but a kilo of zucchini for 5c when I was a kid and now it's a few dollars, but it's still a kilo of zucchini (or the price of a house or can of drink or car or whatever you like can be used).... and people say "Oh my God, hurricanes are causing more value in terms of $$$, so climate change is the explanation!" despite the fact that the actual incidence of hurricanes isn't changing (and no, I'm not a climate change denier, I know the average global temperature has increased over the last few decades, etc).

The climate change farce is based on a true story but overall it's a massive exaggeration and some aspects of it like this are somewhere between blatant deception and outright dishonesty. There's usually enough truth mixed in to make the narrative seem convincing, and in some ways it's a legitimate issue which we should be addressing (but we definitely won't and the nonsense suggested by the most high profile climate change spokespeople is absurd garbage which wouldn't work anyway).

The cyclone/hurricane damage increase, measured in dollars, to 'prove' climate change, is completely asinine and absolutely dishonest. The wildfire farce is too. Less land is being burned every year, this trend is very consistent over a long period of time.

It's much like going to the shop to buy a milk in a disposable plastic bottle, bread in a disposable plastic bag, cereal in a plastic bag (inside a cardboard box), water in disposable plastic bottle, soft drink in a disposable plastic bottle, bananas in a disposable plastic bag, cookies in a disposable plastic box, a roast chicken in a disposable plastic bag, etc etc etc, but if you carry it all to the car in semi disposable plastic bags it's okay, and of course you can't use a plastic straw because now if you use paper straws and make yourself uncomfortable, you're saving the planet, in the same way that if you eat a Big Mac, a Quarter Pounder, a large shake (with a paper straw to make you an ecowarrior) and two serves of large chips, you're a disgusting, fat, unhealthy pig unless you add a Diet Coke (TM) to your order, and then you're being health conscious.

People are really embracing the modern psyops, and the more absurd, the more they love them.

 

[Smurf1976]

in some ways it's a legitimate issue which we should be addressing

Common sense says that changing the composition of the atmosphere ought have some effect on something. Change one variable and it's going to upset something somehow.

Scientific knowledge gives us a pretty good idea what those effects are likely to be. Not a perfect understanding, but it points us in the overall right direction that temperature would be expected to change.

But yes, there's a lot of nonsense surrounding it all. A lot of things that are basically along the lines of saying that we stopped burning off, then because we've stopped burning off someone decided to build houses deep in the bush, then there was a fire disaster. Now since we didn't have such disasters previously it must be climate change.

There's real science here but there's also politics and there's also the consequences of stupidity. The key is to separate which is which.

Climate has, after all, become a catch-all get out of jail card for failures of firefighting, water supply, power supply, road maintenance, flood prevention and so on. If anything goes wrong then just blame climate. Never mind that the firefighting budget was cut in half whilst nobody bothered to maintain the power line through the overgrown bush the combination of which unsurprisingly ended in disaster.

 

[divs4ever]

The impact of extreme weather events turbo charged by global warming continues to undermine the Insurance industry. Check out the top 5 years of insurance costs in the table below

Hurricane Idalia could become 2023’s costliest climate disaster for the US​

Analysts estimate the category 3 storm has already racked up a preliminary cost of $9.36bn, straining the insurance industry

Richard Luscombe in Miami

@richlusc
Thu 31 Aug 2023 22.37 AESTFirst published on Thu 31 Aug 2023 20.00 AEST



Hurricane Idalia could become the costliest climate disaster to hit the US this year, analysts say, with massive implications for the insurance and risk management industries.
The category 3 storm that barreled into Florida’s west coast from the Gulf of Mexico on Wednesday, then carved a path of destruction and flooding through Georgia and the Carolinas, has a preliminary price tag between $9.36bn, based on early estimates, from risk analysts at UBS, and $18bn-$20bn calculated by AccuWeather.

View attachment 161849
What is a storm surge and what is the threat from Hurricane Idalia?
Read more
It follows 15 previous “individual weather and climate disasters” recorded in the US already this year by the National Oceanic and Atmospheric Administration (Noaa) as unprecedented heat, wildfires, storms and floods escalate.

Cumulatively, Noaa said that by the end of July, which Nasa said was Earth’s hottest month on record, the total estimated cost of the damage caused by the disasters was $39.7bn. That figure does not include the estimated $5.5bn cost to rebuild the town of Lahaina following devastating wildfires that razed the Hawaiian island of Maui this month.

“The costs are becoming unbearable,” said Tom Larsen, senior director of insurance solutions at CoreLogic, a property analytics provider that publishes an annual hurricane risk report.

“The business of insuring for catastrophes used to mean exceptional, very rare events and that’s not what we’re seeing. These are much more common, so something’s got to change.”

Larsen noted that Hurricane Idalia’s strike in a rural and lesser-populated area of Florida, with fewer insured structures, would keep its eventual cost below other major cyclones, such as Hurricane Ian that struck last year and left a $113bn trail of devastation.

But he is concerned about the possible impact on an already fragile insurance market in Florida, which has seen several large providers leave or go out of business in the last two years despite efforts by state lawmakers to make it a more welcoming environment.

Fewer providers means higher premiums to consumers, and the cost of reinsurance, which insurance companies purchase to limit their own exposure, has soared. That cost is also passed on to customers, further fueling the home insurance crisis.

Hurricane Idalia could become 2023’s costliest climate disaster for the US

Analysts estimate the category 3 storm has already racked up a preliminary cost of $9.36bn, straining the insurance industry

www.theguardian.com

View attachment 161848

but will it be enough to give me another cheap entry into QBE ?

 

[qldfrog]

Common sense says that changing the composition of the atmosphere ought have some effect on something. Change one variable and it's going to upset something somehow.

Scientific knowledge gives us a pretty good idea what those effects are likely to be. Not a perfect understanding, but it points us in the overall right direction that temperature would be expected to change.

But yes, there's a lot of nonsense surrounding it all. A lot of things that are basically along the lines of saying that we stopped burning off, then because we've stopped burning off someone decided to build houses deep in the bush, then there was a fire disaster. Now since we didn't have such disasters previously it must be climate change.

There's real science here but there's also politics and there's also the consequences of stupidity. The key is to separate which is which.

Climate has, after all, become a catch-all get out of jail card for failures of firefighting, water supply, power supply, road maintenance, flood prevention and so on. If anything goes wrong then just blame climate. Never mind that the firefighting budget was cut in half whilst nobody bothered to maintain the power line through the overgrown bush the combination of which unsurprisingly ended in disaster.

but geological experience also proves that C02 concentration does not significantly affect the world temperature.(at least not a 2 or 4 or 10% increase
So if climate change (change against what, compared to what?) then is it due to cycles, solar flares, various volcanic activities or human cause, and if the later, could it be just due to human activities..aka every energy used be it solar chemical wind or burning fuel or uranium ends up in entropy..aka heat...
Something I found interesting and actually related for anyone who wants to have a bit of thinking instead of parroting..
A bit of education:
CO2 concentration on earth were geological times ago 1000% more than current one..Check if you do not believe me..
Plants and life weres ultra plentiful, on an hyper speed due to this co2 availability and something happened:
when plants died, at the time, all solid fibers were unable to be digested by bacterias/fungus and slowly built up as a deep mulch layer all over the planet, these layers were to become the coal seams of today being buried by floods, landslides, oceans changes and erosions.
The earth atmosphere was getting poorer and poorer in co2 which had catastrophic outcome on life speed and diversity and could have ended up life on earth had it carried on.
Luckily evolution came to our rescues and some bacteria suddenly mutated to be able to digest these hard cellulose bits, returning it back to the atmosphere..as co2:
that was the end of the carboniferous area..not sure of the english name ..
No coal or petrol got formed from there on, and CO2 level kind of stagnated allowing a slower metabolism but a sustainable one.
Human came, co2 increased by a few % allowing us conservatively to reach 10% to 20% extra yield in agricultural production..
not all is bad
As we all agree that we will never be able to extract and burn all coal /petrol/gas ever created, it means we will never ever reach the concentration of our previous garden of Eden.
I also posted a link (recent) which I never have seen proven wrong that explained how all solar farms plus batteries setup in Australia end up producing more CO2 (mostly in China I agree) than they save on their limited lifetime.
So while I agree that moving to a non fossil fuel is a desireable outcome: pollution, sustainability if only for these:
in 2023, each time you see a solar farm or a wind farm + battery, be aware that we are just paying dearly for a clear conscience by buying canned fossil fuel energy from China..which can then be blamed for the CO2 release ..the hypocrisy..
Please note that I am not aware of a serious proven study of the overall solar/wind + hydro as a battery CO2 results.
It should be better but I have no data and keen on learning of any..I guess its balance could be positive ..hope so

 

[divs4ever]

the only sound logic for zero-carbon emissions is if you planned to totally deforest the Earth , which is possible given the rapacious predators driving this agenda , because nature is rather capable of adapting planetary life all by itself without the help of these egotistical half-wits .

( several million years of history/archaeology proves that , or science is a cess-pit of lies )

 

[basilio]

All still happening with insurance

Australia must urgently adapt to extreme weather or face soaring premiums, insurers warn

Exclusive: Assistant treasurer says insurers warned government ‘you’ve got five years’ to reduce vulnerability to climate crisis

www.theguardian.com

 

[divs4ever]

LOL

hoping the Government will get it right ( this time ) while the insurers up profits and premiums

( i hold QBE , SUN and TWR )

unless of course there is a huge financial collapse that vaporizes the insurers investments ( now that is both foreseeable and possible )

 

[divs4ever]

BTW i don't see any 'climate alarms ' over burst pipelines in the Baltic Ocean ( four of them in the last two years )

maybe they should stop transporting gas internationally if they really cared about the 'climate '

 

[mullokintyre]

The real story.
Always follow the money. Always.
From Daily telegraph

Across both types of insurance – life insurance and general insurance, which includes everything from pets to cars and homes – total profit has quadrupled, ballooning from $1.4bn in the 2022 financial year to $5.8bn in the 2023 financial year.29 Aug 2023

And this from KPMG

Gross Written Premium (GWP)​

• In the year to 30 June 2023, Gross Written Premium (GWP) for general insurers1 has increased by 12.2%. There have been increases in GWP across all major lines of business, except for Professional Indemnity, primarily driven by increases in average premiums.
• Average premiums for the year to 30 June 2023 have increased by 10-18% for property classes including Domestic and Commercial Motor, Houseowners and Householders’ insurance, and Fire and ISR. Over the same period, average premiums for Public and Product liability have increased by 14.5%, whilst average premiums for CTP and Professional Indemnity have remained relatively flat.
• For the year to 30 June 2023, Commercial Motor and CTP have seen growth of 5.5% and 5.6% respectively in the number of risks written.
• Other lines of business include the Travel insurance product, which has seen a return of gross written premiums to pre-COVID levels. This is attributed to increased travel over this period, and a greater cost for travel insurance than prior to COVID-19.

Underwriting Profitability​

• In the year to 30 June 2023, Underwriting Profitability for general insurers1 was $5.70 billion, compared to the underwriting result of $6.08 billion in the previous 12 months.
• The main drivers behind Underwriting Profitability movements from the 2022 financial year to the 2023 financial year are:
  • Fire and ISR, which includes commercial property, has had an increase in underwriting result from $911 million in the 2022 financial year to $2,051 million in the 2023 financial year. This increase in underwriting profit has primarily been due the release of reserves for Business Interruption by insurers following recent court decisions on policy wordings for pandemic exclusions and also as a result of premium increases.
  • Severe weather-related events have impacted the results of both the 2022 and 2023 years. These events include the May 2023 Newcastle hailstorm, Central West NSW floods in November 2022; Victoria, NSW and Tasmania floods in October 2022; NSW floods in July 2022; and Queensland and NSW floods from February to April 2022.
  • Increases in net incurred claims for the March 2023 quarter to $9.17 billion, which had increased by 20.4% compared to the December 2022 quarter ($7.62 billion) and increased by 36.5% compared to the March 2022 quarter ($6.72 billion).

The insurance companies are laying the groundwork to increase premiums and thus their profit margins.
They know full well that there is little Australians, either at a personal level or at Government level can do to mitigate climate change.
If we eliminate all fossil fuel usage from OZ, it will make such a small impat it will not be noticable to anyone.
The Insurance companies need to talk to the Chinese, the Americans, the Indians, the members of OPEC etc etc.
Mick

 

[divs4ever]

The real story.
Always follow the money. Always.
From Daily telegraph

And this from KPMG

The insurance companies are laying the groundwork to increase premiums and thus their profit margins.
They know full well that there is little Australians, either at a personal level or at Government level can do to mitigate climate change.
If we eliminate all fossil fuel usage from OZ, it will make such a small impat it will not be noticable to anyone.
The Insurance companies need to talk to the Chinese, the Americans, the Indians, the members of OPEC etc etc.
Mick

but other scenarios , like widespread civil unrest , or a wave of business collapses , could easily make those cash reserves look inadequate

 

[orr]

Ross and Rod, go you little beauties.... Make Australia Great Agian.

Professor Rod Sims AO & Professor Ross Garnaut AC

Professor Rod Sims AO, Chair of the Superpower Institute and Professor Ross Garnaut AC, Director of the Superpower Institute, Director Zen Energy, Member of the Net Zero Economy Agency Advisory Board will Address the National Press Club of Australia on 'Realising Australia’s economic and climate...

www.npc.org.au

 

[divs4ever]

** net zero economy ** i hope those rank and file unionists noted that , because it is their jobs they are trying to erase

 

[Value Collector]

the only sound logic for zero-carbon emissions is if you planned to totally deforest the Earth , which is possible given the rapacious predators driving this agenda , because nature is rather capable of adapting planetary life all by itself without the help of these egotistical half-wits .

( several million years of history/archaeology proves that , or science is a cess-pit of lies )

yes the planet will survive climate change, but that doesn’t mean our civilisation as we have built it will, or that it will be an enjoyable process.

evolution works through death and destruction.

 

[Value Collector]

The real story.
Always follow the money. Always.
From Daily telegraph

And this from KPMG

The insurance companies are laying the groundwork to increase premiums and thus their profit margins.
They know full well that there is little Australians, either at a personal level or at Government level can do to mitigate climate change.
If we eliminate all fossil fuel usage from OZ, it will make such a small impat it will not be noticable to anyone.
The Insurance companies need to talk to the Chinese, the Americans, the Indians, the members of OPEC etc etc.
Mick

When it comes to insurance companies, they aren‘t really as concerned about increasing “Profit Margins” as they are with avoiding losses, and the best way to reduce your chance of losses in insurance is to price your premiums right.

The basic business model in insurance is to collect just the right amount of insurance premiums to cover your expected losses and costs and maybe make a 1% underwriting profit if you can, so that you avoid making an “ underwriting loss” but have your premiums low enough that you can sell loads of policies.

The real money in insurance is made by then taking all those insurance premium, called the “float”, and investing it between the time you collect it and the time you have to pay it out, which might be 50 years Sometimes.

Even if an insurance company loses 1% a year on their polices, as long as they earn more in their investment, say 5% they can have a wonderful business. But you don’t want losses to consistently be greater than the premiums By a large margin.