*Not that they're suffering much; they'll just make you pay. Until you can't.
http://planetark.org/wen/61168
"In Chester County, South Carolina, off a dirt road in the middle of a field, insurance companies are literally unleashing a storm.
"To simulate hurricane-like conditions, an industry group has built a wind tunnel big enough to accommodate nine large residential homes. Some 105 fans deliver gusts of 175 miles per hour, destroying dwellings built precisely for this purpose.
"The goal is to construct homes across the country that can withstand the worst Mother Nature has to offer, which lately has been quite a lot – not to mention tough if not impossible for insurers to predict. (((A climate-crisis simulator that smashes fake homes. Something very BLDGBLOG about that.)))
"One thing we as a society don't really do anymore is build for where we live. We build for how we want to live," said Julie Rochman, chief executive of the Institute for Building and Home Safety, the industry-sponsored group behind the wind tunnel initiative. "There's a wonderful ability to be living in denial and where disaster happened a long time ago we get disaster amnesia."
It's a tough time to be in the $500 billion U.S. property insurance business. Storms are happening in places they never happened before, at intensities they have never reached before and at times of year when they didn't used to happen.
Those bizarre weather patterns damage not just homes but also insurance companies' financials. If seas rise and houses flood, insurers pay. If winds shift and buildings blow down, they also pay. If temperatures rise and crops fail, same thing. (((Actually it's formerly-stable Arab regimes who pay under those crop-failure circumstances.)))
The industry hasn't reached a consensus on what's causing weird weather.
"It's hard to really deny that global warming exists," said Karen Clark, chief executive of Boston-based Karen Clark & Co., which helps insurance companies forecast natural disasters. "You can accept that and that's fine, but that doesn't mean we can quantify the impacts." (((But the only business you have is to quantify the impacts. What other service do you offer?)))
Others in the business are reluctant to assign blame to broader trends. "Our view would be it's too early to come to a conclusion," said Liam McGee, chief executive of the Hartford Financial Services Group. ((("We'd like everybody to be dead first. No people, no payouts!")))
What no one disputes is that the storms the industry expects aren't happening and the ones they don't expect are hitting them hard.
The implications are profound for consumers as well as insurers. If hundred-year storms are now at risk of happening every 40 years or every three, it is difficult to know how much property insurance should cost. (((Well, yeah. Basically, it means that real-estate is radically destabilized – that financial system doesn't map onto a wrecked climate. It's like buying real-estate insurance under a saturation bombing that doesn't end for centuries.)))
The last couple of months underscore just how much climate seems to be changing. Queensland state in Australia has suffered a virtual apocalypse – flooding in December, flooding in January and tropical cyclones in February that inundated at least 30,000 homes and crippled the local coal industry. (((Not that Australians have woken up and banned coal, or anything.)))
Meanwhile in the United States, snow fell on Christmas Day in a number of southern cities for the first time since at least the 1880s. Los Angeles got six months' worth of rain in three weeks, causing some of the worst flooding in the state's history. The New York metropolitan area had an unprecedented blizzard the day after Christmas and a month later got almost the same, breaking historical records. (((It's fraud by scientists, guys who are widely noted for fraud, unlike, say, radio demagogues.)))
Private weather service AccuWeather, in a blog entry on its website two days before the Christmas blizzard in New York, asked its forecasters for their take on the sophisticated, expensive new computer models used to predict the path and behavior of the storm.
The forecasters' collective answer, according to the blog: "None of them are right." (((That's comforting, isn't it? You might as well forecast a blight of Seussian oobleck.)))
Worldwide, insurers suffered at least $36 billion in catastrophe losses in 2010, according to Swiss Re – the fourth-highest total of the last decade, and the highest if years with major hurricane landfalls are excluded.
But this year, as with last year and the year before, what insurers are seeing is the unexpected. That means both storms going where they're not supposed to as well as a spate of totally unexpected losses at entirely unpredicted times of year. (((Imagine the entirely unexpected famines and the entirely unpredicted plagues. Of course they were predicted. Decades ago. Climate change is one of the easiest things in the world to predict. Nowadays you don't even have to "predict" it, it's a simple matter of publicly recognizing present-day realities.)))
"Some people believe that is because weather patterns have changed. I happen to be in that camp," said Tom Wilson, the chairman and chief executive of Allstate, the largest publicly traded property insurer in the country. "I just don't think it should happen three years in a row."
One of the biggest problems for insurers is that they have to insure increasingly valuable properties in risky areas that, by and large, are not being built with disaster risk in mind. That in and of itself is driving their risk up dramatically....
