The impact of climate change on the insurance market remains difficult to predict according to a leading climate expert.
During a Lloyd’s risk lecture, Dr Stephan Harrison, senior lecturer in physical geography at Exeter University, and senior research associate at Oxford University Centre for the Environment, said that the climate change currently occurring was difficult to forecast due to man-made factors not seen in past climate shifts.
For example, he said that carbon dioxide concentrations in the atmosphere are at their highest levels for 650,000 years, putting forecasters into “uncharted territory”.
As a result, Harrison said that it was difficult for scientists to determine the likelihood of events occurring over the next five to ten years.
Harrison also warned that the risk environment could change in ways not yet considered by the insurance market as a result of climate change. He said aside from physical changes such as an impact on the frequency of floods, droughts, landslides and hurricanes, other risks included political instability if climate change puts pressure on natural resources such as water, and the possibility of environmental terrorism
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He said social changes such as migration and civil unrest, and economic changes such as currency fluctuations could also result from climate change.
He added that there was little that could be done now to prevent global warming from occurring at all. “Climate change is here to stay. Even if we stop all emissions now we’d still have 30 years of warming.”
Lloyd’s franchise performance director Rolf Tolle said that understanding the impact of climate change was important, as it could provide the market with opportunities.
