Eleven extreme weather events took place in the US in 2012. Each left at least $1 billion in damages in their wake. Besides the cost in human life, Superstorm Sandy left behind some $50 billion in economic losses, along with insured losses by property & casulty (P&C) insurers in the tens of billions of dollars.

US insurance companies are well aware of the rising costs of increasingly frequent and more intense extreme weather events, as well as those associated with less sudden and intense shifts in weather patterns and climate. Yet most are ill-prepared and “only just beginning to address the effects climate change may have on their businesses,” according to a new report from Ceres, a coalition of investors, companies and public interest groups advocating from sustainability leadership.

“Climate change is potentially a serious financial threat to the insurance industry, and needs to be on insurers’ and regulators’ radar,” Washington State Insurance Commissioner Mike Kreidler, a leading advocate for stronger climate risk disclosure and action by insurance companies, was quoted in a Ceres press release. “If insurance is to remain available and affordable, companies will need to adapt. The last thing we want to see are unprepared companies simply pulling out of markets or seeking unreasonable rate hikes.”

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