The effects impact insurance at every level and require proactive intervention—from improving our approaches to mitigating risk to preparing for increased occurrences of catastrophic loss, you’ll want to be prepared to discuss this topic with your clients as their trusted expert in all things insurance.
Karen Ritchie, Vice President of Baird MacGregor Insurance Brokers, facilitated our recent webinar, Climate Change and How to Sell Catastrophic Coverage, where she shared a number of relevant discussion points.
- Earth’s surface temperature has risen by one degree—scientists say if we get to the two-degree mark, we could wipe out most of the environmental advances from the 20th century
- Extreme weather events like wildfires, hurricanes, extreme heat and flooding will continue to increase in severity, intensity and frequency because of climate change
- Insurance companies need more capital as catastrophic losses continue to happen more frequently—the annual average of insured catastrophic losses since 2011 is $65.5 Billion USD; the past couple of years have been much higher than average
- For additional talking points, check out Karen’s article on climate change in the June issue of TOB
This year the industry’s seeing a withdrawal of insurers writing in geographical areas, with flood coverage, as an example. Studies show that 94% of the population doesn’t know whether they live in a flood zone. You’ve likely heard the familiar refrain from clients: “I live on the 10th floor, I don’t need flood coverage,” or “I live on a hill, rising water levels won’t affect my property.” Karen recommends FM Global, an interactive global flood map that indicates whether a specific address is in a flood zone.
The combination of an increase in extreme weather events, insurers withdrawing from certain areas and consumers general lack of knowledge leaves the door wide open for broker advice. Understanding climate change will give you an opportunity to have important conversations with clients and demonstrate your knowledge and expertise while offering the best coverage.