Insurers keep close eye on extreme weather report

Adriene Hill Mar 28, 2012

Stacey Vanek Smith: Later this morning the Intergovernmental Panel on Climate Change will release a new report on extreme weather. Among the groups watching closely: the insurance industry.

Marketplace’s Adriene Hill reports.

Adriene Hill: The new report will help suss out the relationship between climate change and extreme weather events — things like droughts, tornadoes and flooding — which are big deals if you’re an insurer.

Lindene Patton is with insurance company Zurich Financial Services.

Lindene Patton: The effects of climate change can certainly impact our entire portfolio.

I.e., they can cost a lot of money. Scientific predictions can also help insurers figure out what to cover, and for how much.

But the insurance companies aren’t the only ones who could feel the pinch of more weather disasters.

Cynthia McHale: This hits all of our pocketbooks.

Cynthia McHale is head of the insurance program at the nonprofit coalition, Ceres.

McHale: Because if private insurance won’t cover extreme weather damage to homes and businesses, in fact, taxpayers are on the hook.

Why? Here in the U.S., many insurance programs are backed by federal or state governments, especially in places that private insurance companies don’t want to cover the weather risks.

I’m Adriene Hill for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.