Lloyd’s chairman addresses climate change

Insurers need to address global climate change as they are faced with the growing cost of extreme natural disasters, advised Lord Peter Levene, chairman of Lloyd’s of London.
“We cannot risk being in denial on catastrophe trends,” he recently said in a speech to the World Affairs Council. “We urgently need a radical rethink of public policy, and to build the facts into future planning.”
According to Levene, the number of catastrophes has doubled since the 1960s and insured losses have increased nearly seven-fold, most of them being weather-related. The worst year on record came in 2005 with total global insurance claims of US$83 billion over 80% from US hurricanes.
“Over the coming years, with warmer sea surface temperatures making landfall more likely, particularly destructive storms are a likely scenario,” Levene said.
“We can expect the storm season to lengthen, and we will be at risk over a wider geographical area than ever before.”
According to Levine, a growing number of insurers are in acknowledgement that global climate change was playing an adverse role.
Levine said Lloyd’s is taking the necessary step to address the climate change by investing in scientific research in the US and UK.
Lloyd’s also insures new green technology, including a third of insurance for waste-to-energy recycling plants and a quarter of the world’s wind farms.