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‘Insurers are familiar with managing risks to our community that are often quite uncertain and sometimes potentially catastrophic. Yet Australia is tolerating a level of climate-change risk that would be unthinkable if the nation was held to the same standards that we apply to safeguard the survival of the insurers, banks and superannuation funds that we all depend upon in our daily lives. These levels of risk are dwarfed by the risk levels to our way of life that are reliably attributed to potentially catastrophic climate change impacts, unless we act with urgency to rapidly reduce greenhouse emissions.’

Tony Coleman, Insurance Australia Group

These blokes know all about risk and risk management. Big Insurance are modern day soothsayers in suits. They make billions in profits each year by ‘gambling’ on risk that never happens.

Big Insurance are essentially bookmakers who assess risk and take your money from you when there is a very low risk that something bad will happen. When there is a high risk that something bad will happen they take lots of extra money from you (in some cases won’t let you get on at all), and are slow to pay out when something bad happens.

We think insurers are okay when they pay out our claim. They drive us crazy when they tell us we have experienced a swollen river event rather than a flood. They refuse to pay up pointing out some fine print at the bottom of page 56, part B, subsection 1.22.3, paragraph 16, line 5, which no sane person could or would ever read. These blokes are brilliant! They know risk and they know how to avoid it.

Global costs of extreme weather events.
Click image to enlarge.

One risk that they know all about is Climate Change, extreme weather events, rising sea levels and rising temperatures. The insurance industry was onto this way back in the 1980s, long before any other business group. Why? Because it affects their profits if they get it wrong. And they have been getting it right.

Find any insurance industry report going back twenty years, and you’ll see they have been ringing the warning bells for some time. Big Insurance’s massive income depends on things not going wrong.

When Big Insurance puts up its rates in areas not previously prone to flooding, get ready for a flood.

Insurance companies are the bookmakers of disaster – they look at the facts, do their sums and they act without emotion. They cover their bets to make a profit.

So for anyone telling you, ‘Don’t worry about this climate change business, it’s all a crock.’ We say – ’check with Big Insurance.’ They are the ones who understand risk and will have to pay out when it happens – and we know they do their best to avoid doing that.

The biggest insurer in Australia Insurance Australia Group (IAG) recently gave a presentation on Climate Change and the associated risks.

The final slide in the presentation featured the following conclusions:

1. Climate change is real and early action is needed
2. IAG is keen to ensure insurance remains affordable and available
3. Action required on many fronts
4. Insurance industry is a key player in an effective economic & societal response.