States Mandating Climate Change Risk Assessments From Insurers
Last year's string of natural disasters and resulting supply chain disruptions appear to have gained the concern of not only private businesses but governments as well. This week, regulators in the states of New York, California and Washington moved to require insurers to disclose their risk assessments for natural disasters stemming from global climate change.
Recent research has shown the vast majority of companies have no formal policies in place to manage climate change. Until now, only about a third of the largest insurers have been required to complete a risk survey. Only 25 percent of large firms voluntarily comply with the measure, so state governments are now mandating that the rest do as well - at least for companies writing policies worth more than $300 million nationwide.
However the measure has its share of critics who argue that the insurance industry far exceeds others when it comes to gauging the financial, environmental and supply chain impact of climate change.
"No industry discloses more about the impact of climate on its earnings and its ability to operate," Robert Hartwig, president and economist at the Insurance Information Institute, told The New York Times. "Look at any quarterly earnings report and you’ll see it's full of the impact of weather on earnings."
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