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Crony Environmentalism: Insurance Firms Exploit Climate Fears to Raise Rates

If your rates have gone up, ask if your provider is factoring “climate change” into your bill.

Dr. Tim Ball and Tom Harris


June 15, 2013 - 12:00 am
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Crony capitalism describes unduly close relationships between businesses and governments. It should also apply to groups which regularly favor one business over another for reasons other than financial profitability. It is a naive approach, because business is ultimately about profit. Anything else is a marketing ploy to further business opportunities. A business that does not make profit does not survive, no matter how green they may appear. Alternative-energy companies often demonstrate this, as many of them fail despite generous taxpayer-funded subsidies.

Recently, certain insurance premiums have risen dramatically. Why? Some firms say it is due to global increases in natural disasters.

In reality, there has been no increase in hurricanes, strong to violent tornadoes, or most other extreme weather-related events. Further, global conditions should be irrelevant to local insurance policies — no one experiences phenomena averaged over the entire planet. We all live and experience weather and climate in regions, and if we recognize that conditions are normal in our area, the threat must be somewhere over the horizon, if it exists at all.

The condominium-management team of one of our residences, after inquiring about a rate hike, was told that computer model-determined earthquake risk was higher in our area than previously thought.

What computer models? Which ones can accurately predict earthquakes? The answer is none.

Similarly, all computer model long-term weather and climate forecasts have been wrong. However, they are used as the basis for government and insurance business actions — this costs society billions of dollars.

Perhaps more than any other sector, the insurance industry has exploited fear of natural events and climate change. Re-insurance companies that insure smaller insurance companies have proliferated and have become increasingly competitive. These companies appear to be inflating income by exaggerating fear rather than by letting natural competition drive costs down.

The two largest companies in this field are Munich Re and Swiss Re. Both are actively involved in promoting alarm about global warming and climate change.

In 2004, Swiss Re funded The Great Warming, a three-part TV series shown on Discovery and other outlets. We were told regarding the series:

Experts, including Swiss Re’s climatologist Gerry Lemcke, participated in the series and sat on its advisory board to ensure the documentary would impress on its audience the importance of moving towards more climate-conscious behavior and business practices.

John Coomber, Swiss Re CEO in 2004, said:

Swiss Re is fostering broad awareness of climate risks and has committed financial resources and know-how to support “The Great Warming.” … We are taking a leadership role by putting strategies in place that will deal with the risks (and the opportunities) of our changing climate.

Where are Swiss Re’s forecasts today? The warming they and the United Nations Intergovernmental Panel on Climate Change (IPCC) predicted and exploited stopped in 1998. Yet — as recently as November 9, 2012 – the insurance giant asserted:

Today, global warming is a fact.

What warming?

There has been none in the past decade and a half, and the UK Met Office forecasts essentially none until 2018. Is Swiss Re activism any less biased than that of someone who takes their marching orders from a fossil fuel company?

Munich Re claims:

 [The company] invests a large proportion of its funds on the basis of sustainability criteria (socially responsible investments). … Some €100m has already been invested in renewable energies alone and our commitment in this sector is set to increase in the future.

“Social responsibility” requires recognition and planning for climate and weather realities, not taking advantage of public fears. It also requires acknowledging the frequent failure of alternate energy companies despite massive support from government and industry.

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All Comments   (8)
All Comments   (8)
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Most of the rhetoric complaining about insurance company practices is a combination of (1) resentment of the requirement of premium payment and (2) a rationale for exaggerating legitimate claims. (Stealing from an insurer, after all, is like stealing from Al Capone.) There may be some resentment for rising premiums over recent years caused by the low interest rate created by the Fed.

Insurers are in the risk management business and are competitive enterprises. There are over 2 million insurance companies in the US and over 450,000 property and casualty insurance carriers. If some companies use irrational metrics, like global warming, to calculate risk and determine premiums, companies that use sounder methods should offer comparable coverage at a lower rate. Shop around. Not everyone buys into AlGore's climate change BS.
1 year ago
1 year ago Link To Comment
Good advice. There will always be those that take advantage of a "good crises", especially is they believe thay have your business.
1 year ago
1 year ago Link To Comment
While we are distracted with the Obama Economic Redistribution Policy he sold as a Policy that would pertain to US Citizens our Self Reliance is being Consolidated by Foreign persons and they are doing it with our own Debt leveraged against us !!!!!

And the Federal Reserve just keeps Burying the US Taxpayer while we the people are not even able to participate in our own DEBT allocation ,see the latest next 2 stories all in the name of WHAT helping the Middle Class , how does that work when we the little people cannot access these same capital resources but are being left responsible for this debt ?????

WHO allows this to HAPPEN ???

US Taxpayers are Financing the
Takeover of their Own Economy by Foreign Interests using the Federal Reserve
driven Carried Currency Trade instead of being allowed to Participate in
its ownership and operations !

Thai Billionaire’s 7-Eleven Reaps 1,700% Gain: Chart of the Day

Beware The Great Central Bank Bubble

In this article it says the Thai Billionaires used 6.6 billion of Federal Reserve
QE cash to Buy up food distribution centers , and this kind of Consolidation of
USA distribution by NON US Citizens not being able to have this same access to
Capital to compete for these assets is a Threat to Wealth Equality and
distribution . Where’s the equality going to come from with this Economic
Practice that will allow all classes a shot at the American Dream ????

1 year ago
1 year ago Link To Comment
The insurance companies have been scamming the public for years in California with earth quake insurance with the help of the government laws and promotions. The trick here is 10 or 15% deducible against the high prices of homes. The very few homes that get shaken down substantially do get protected. But the millions who actuarially experience nothing and the thousands who just get broken windows and a few plaster cracks , a sidewalk upheaval or a chimney brick through the roof, well, thanks for the premiums, but you are on your own. Its a highly profitable scare- tactics program aided and abetted by the dufus government - somewhere I am sure there are campaign contributions in the mix.
1 year ago
1 year ago Link To Comment
When I was young in the days of Camille and Agnes, the nation had a population of about 200 million. Today it's over 300 million, far more of whom live near the sea shore (and in Florida). Of course, a hurricane today is going to have more of an impact.

A tornado that hits a municipality with a pop of 1,000 over 10 square miles is going to have much less of an impact than one that slams through the new Oklahoma City suburbs. OKC, btw, is not almost twice the size of mid-20th century top-10 cities Pittsburgh, St. Louis and Cleveland.

1 year ago
1 year ago Link To Comment
An acquaintance who is an insurance broker once told me that flood insurance is the ONLY type that is allowed to spread its risk across the entire country. IOW those of us who do not own property on the Gulf Coast subsidize flood insurance for those who do.

In the early 1900's there was at least one hurricane that waltzed up the east coast that would have done trillions in damage if it had happened today, and would have made Sandy look like a kitten.
1 year ago
1 year ago Link To Comment
Doc Ball and Mr. Harris,

I recall some years back Munich had in place a 'system' for their traffic lights whereas any time of day Munich drivers would not and could not 'hit all the greens'.

The Munich engineer's purpose with this action was to 'encourage' the populace to use OTHER methods of transportation.

You know, for their own good and all.

NWO types suck.
1 year ago
1 year ago Link To Comment
Home insurance carriers in the northeast raised their premiums YEARS ago based on computer models of increasingly turbulent weather predictions based on global waring. How do I know? My premium DOUBLED in one year. I spoke with the insurer who told me that was the reason. They have collected BILLIONS because of phony science. And there is no end in sight. I was warning people via the internet for the last four years about this swindle. You just realized it? There should be class action suits and the insurance companies should be forced to rebate anyone who was gouged.
1 year ago
1 year ago Link To Comment
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