Examining the Threats Posed by Climate Change, Hearing Before the U.S. Senate Committee on Environment and Public Works, Subcommittee on Clean Air and Nuclear Safety, One Hundred and Thirteenth Congress, Second Session, July 29, 2014   [open pdf - 5MB]

This testimony compilation is from the July 29, 2014 hearing on 'Examining the Threats Posed by Climate Change' before the Senate Committee on Environment and Public Works. Taken from the statement of Carl Hedde, "One significant component of our business is providing catastrophe risk insurance to our clients. Due to our history of insuring natural catastrophes (Nat Cats), Munich Re was one of the first companies in the industry to recognize the impact that weather-related events and a changing climate could have on its business model and customers. To address this, the company formed a GEO Risks research unit 40 years ago. The department's goal is to assess scientific research around weather and geophysical events, contribute to scientific discussions with our own research, and feed scientific findings into our business model, where applicable. The GEO Risks group also studies the impact of catastrophic events through a thorough analysis of historical loss patterns. This work helps us to better understand and incorporate this knowledge into our underwriting decisions. The insurance industry relies heavily on historical loss information to make business decisions. However, the use of historical data assumes that the risk we see today is the same as it was in the past. This is not always the case. If a clear, verifiable trend is identified in relation to a certain risk, the trend must be taken into account in the models for them to yield meaningful risk estimates. One area where we do see an upward trend is in regard to losses from weather catastrophes, which, over time, have increased in both frequency and severity. In the U.S., socioeconomic changes have played a substantial role in this increase, but do not explain the entirety of the changes. It is likely that changes in climate, whether from natural variability or due to man's influence, are also playing a role in these trends." Statements, letters, and materials submitted for the record include those of the following: Carl G. Hedde, Kirstin Jacobs, Bill Mook, Bjorn Lomborg and Raymond J. Keating.

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