More states asking insurers if they're ready for climate change

From a press release we just sent out:

Insurance companies are facing growing scrutiny over their preparedness for climate change, an issue that could potentially affect insurance affordability and availability.

�I�m very pleased to see more states joining this effort,� said Washington Gov. Jay Inslee. �Being prepared is clearly in the best interests of both insurers and the families and businesses they insure.�

Last year, insurance regulators in Washington, California and New York surveyed major insurers about what steps they�re taking to address risks to their underwriting and investment portfolios.

This year, regulators in Connecticut and Minnesota have also joined the survey.

�Climate change is a potential game-changer for insurers,� said Washington Insurance Commissioner Mike Kreidler. �We want to make sure that this issue is on their radar.�

Climate change poses a double challenge to insurers. Extreme weather events and droughts, for example, can sharply increase claims. Climate-related issues could also have a significant effect on insurers� investments, potentially affecting their long-term ability to pay claims.

�Unprepared insurers are much more likely to simply pull out of markets, leaving homeowners and businesses struggling to find alternative coverage,� said Kreidler, who chairs the National Association of Insurance Commissioners� working group on climate change. �And when insurers abandon a market, government tends to end up as the insurer of last resort.�

Kreidler�s office has been surveying insurers on this issue since 2008.

�I wish some companies were further along,� said Kreidler, �but I�m encouraged to see that a growing number of companies are taking steps to incorporate climate change into their risk modeling and investment considerations.�

For a look at past surveys and responses for Washington, California and New York, please see California�s Climate Risk Disclosure Survey web page.