The Canary in the Coal Mine: Property and Casualty Reinsurers and Global Warming

“Global warming is a fact. The climate has changed: visibly, tangibly, measurably.”

You might think this is a statement from Greenpeace or the Environmental Defense Fund or some other liberal environmental group. It isn’t. It is from a report issued eight years ago on 17 July 2002 by the global re-insurance company: Swiss Re.

Most of us don’t know much about re-insurance companies. That’s because they don’t do business with individuals or even with most corporations. With certain exceptions, reinsurance companies deal only with property and casualty insurance companies. P & C firms are the companies which insure industrial and commercial properties, homes, automobiles, etc for loss of property and injury or loss of life on that property.

A common example of the second is this: you are driving a car with several passengers. You get hit by another car and your passengers are injured, that is, they become casualties. This doesn’t mean necessarily that they are dead. It means they are either dead or injured. Your auto insurance policy, which is issued by a property and casualty company, not only insures your car so you can get it fixed, it insures the people who become casualties while in your vehicle. Property and casualty companies take on enormous risks and they lay off part of that risk on re-insurers who are, in essence, companies which offer insurance to insurance companies.

Re-insurance companies are run by bottom-line oriented business people with a keen eye and a sharp pencil. Assessing risk is their business and they are quite good at it. They have to be or they would go bankrupt. They don’t look at global warming or global climate change as good or bad, liberal or conservative, moral or immoral. They simply look at what is occurring through a detailed examination of statistics of every kind. Only by doing this can they price their insurance in a way to make it profitable and protect themselves from unknown risks.

Two of the largest re-insurers are Swiss Re and Munich Re. The first company is Swiss, the second one is German. One would be hard pressed to characterize either the Swiss or the Germans as alarmists.

Says Munich Re on their website now, October of 2010:

“Climate change is a subject that concerns us all. It is one of the greatest risks facing mankind.”

The fact of global warming has somehow become a political issue. This is unfortunate. I look at many things from a business perspective since I spent twenty years in the financial services industry. I have also worked as a contract employee for the Commercial Real Estate Division of Energy Star. (Energy Star is a public/private partnership focused on energy efficiency. The program was begun during the administration of President George H.W. Bush).

There are so many people with various agendas shouting about global warming it is hard to know what the facts actually are. I respectfully suggest, therefore, that if you want hard facts on global warming from unsentimental business people, then follow the links in this post and read for yourself the reports on climate change from the re-insurance companies.

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Charles McCain

Charles McCain is a Washington DC based freelance journalist and novelist. He is the author of "An Honorable German," a World War Two naval epic. You can read more of his work on his website:

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