The greenest of them all

“To me, proving that earth’s climate is changing from human actions—namely global warming—is like statistically ‘proving’ the pavement exists after you have jumped out a 30-story building. After each floor, your analysis would say, ‘so far, so good,’ and then, at the pavement, all uncertainty is removed.”

Wanna guess who said this?? You will be excused for thinking it must be some leftie or some well meaning scientist. It's actually an industry guy; an insurance industry CEO. In a unique and predictable twist, insurance industry leaders are realising that the house always wins only when the house is still standing. Extraordinary changes in the playing field can lead to a losing streak. So major insurance industry giants like Swiss Re are actively considering premium changes and educating its customers about global warming. This has obviously lead to extremely critical statements in Wall Street and other traditionally climate sceptic communities. But when an industry that is 3 times the size and power of the oil industry (insurance worldwide is a 3 to 5 trillion dollar business) crunches its numbers and makes its move, it is very tough to argue against it. Like a good casino owner, Swiss Re is basing its policy not on emotion but the cold fact that the number of recent natural disasters is well beyond what any of its models predict.


The American insurance industry joined the European camp when AIG decided after Katrina to start investing in industries that have active greenhouse mitigating technology or related research. However the key difference is that the Europeans are educating people quite openly about what is happening, and how it might affect reinsurance rates. Swiss Re for example has an openly declared 250 Million Euro warchest just for investing in green technologies. An early result of this policy is a documentary series they financed called The Great Warming. I found it funny that this documentary aired in 2004 had the following lines in it : And the city of New Orleans - already well below sea level and sandwiched between the Mississippi and the sea - is certain to be a victim. Tarot reader John Williamson reads the future, and it's grim.!! The American insurance industry on the other hand is expected to make small efforts to cover its losses and improve its future without openly going against the mainstream industry. It is a more wait and watch policy because in America, unlike in Europe, they can pass the buck to consumers. As already reported widely, consumers in Hurricane Central can expect to pay more to live there with insurance.

To me, personally, the interest shown by the insurance industry is heartening. Not because i think they are turning a new leaf; i could care less about that. But because the underlying principle of the free market has been proven right. Everyone and everything has a price. When the price is too high, change shall occur on its own; in its substantial but at the same time unjudging and uncritical way. Sure, it might be change at what used to called a Hindu rate of change, but change due to economic reasons have a much higher longevity and chance of success than change because some few million tree huggers like me wanted it that way.