Insurance Companies – Silent on Global Warming?

“Environmentalism is not and should not be a religion – instead, we should conceive of it as praxis for business and society.”

Reported by John Bain

If one follows conventional logic, insurance companies should be on the front line against global warming. After all, who do you think pays for the flooding damage, crop failures, and environmental disasters climate change causes?

But as we saw in the financial crash of 2008, “conventional logic” doesn’t always apply when you’re talking about big business.

As green business writer Marc Gunther notes, insurance companies have been “eerily silent” about global warming, providing little in terms of political support or investment in anti-emissions legislation. The New York Times further notes that only one in eight insurance companies even offer climate change-related policies.

Why turn a blind eye towards the biggest thing since the Little Ice Age? Are the insurance giants simply terrified, in denial about the enormous challenge that will confront their business in the coming century? It probably has something to do with the “ostrich” mindset many Americans have towards global warming: if we can’t see it, it’s not there.

This has a lot to do with the political culture in America, where belief in global warming is a highly divisive and politicized issue. As Gunther rightly notes, the situation in the United States (as opposed to other countries) makes support for the green side of the debate a rather risky adventure – and insurance companies, being in the probability business, prefer a safe bet.

In fact, insurance companies would rather leave a high risk area, such as the Gulf Coast, after a disaster that generates a lot of claims, like Hurricane Katrina. Again, the image of the ostrich comes to mind, and Big Insurance’s rallying cry seems to go something like this: “This is dangerous. Let’s keep our hands off it and hope it goes away.” Pretty inspiring.

However, there is more than meets the eye to this insurance “black-out”. Gunther exposes the fact that many insurance companies are also in the business of protecting climate-denying energy companies from liability claims filed by people whose lives and livelihoods have been damaged by global warming.

Hmmm… multinational corporations harboring a vested interest in something vaguely unsavory? You may have noticed stuff like this happens surprisingly often. Uncanny, right?

It just goes to show that there’s big bucks to be made from promoting climate change. The insurance industry knows that political power (read: “money”) lies with the fossil fuel lobby, and so it makes sense to ride their coattails. Plus, the recent spate of natural disasters has allowed insurance companies to charge higher premiums for home owner insurance, whether they acknowledge that climate change is the cause or not.

If you look at other industries, like Big Coal, you’ll realize that an entire business model can be based on continued climate abuses. The arms industry profits off climate change too: global warming causes drought and famine, which can easily spark civil wars.

It kind of makes you think these guys should join forces and form the start-up from Hell. Here’s their deranged plan: first, ruin the climate. Oil, coal, seal-clubbing, whatever. Then, watch tense political situations around the globe devolve into open warfare over ever-dwindling stocks of food and fresh water. Now here’s the kicker: if you’re savvy enough, you can muscle right in there and corner the market on AK-47s! That’s the American way!

Don’t laugh. Someone just read that and a lightbulb went off in their head. Sounds profitable!

But is that the side of history we want to be on? When we fade back into the biosphere, food for worms and fungi, do we really want to be remembered as the generation that definitively screwed up the climate (not to mention each other) forever?

For too long, most of us have conceived of conservation as merely intrinsically good, a sacrifice made for the sake of all humankind. It is this Gnostic mindset – the conception of environmentalism as distinct from the concerns of daily life and material gain – that makes it into something like a religion.

But environmentalism is not and should not be a religion – instead, we should conceive of it as praxis for business and society. Nor do we all have to be saints; even the smallest change helps. We’re seeing this now, with the insurance industry making small steps in the direction of “climate insurance”: for instance, some companies allow drivers who drive less (and use less gas) the option of slightly lower premiums. It’s not much, but we’ve got to start somewhere.

Conservation is not some far-off, transcendental ideal; rather, it’s the only way to make profit and progress in the 21st century. And let me assure you that that progress will be incremental; that sometimes it will not look like progress at all. And those pushing progress won’t be doing it for its own sake; they’re looking to make a buck, just like anyone else. Who can blame them?

We’re in good hands… probably.

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  John Bain is Good-b’s  senior Green Blogger and Associate Editor of Good-b. 

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