November 2, 2023
Washington DC- U.S. Senator Ron Wyden (D-OR) said today that he and U.S. Senator Sheldon Whitehouse (D-RI) have launched an investigation into how insurance companies are addressing the growing risks of climate change, including where they will withdraw or increase coverage. Coverage the companies below. cousins.
Senate Budget Committee member Wyden's investigation; and Whitehouse, chairman of the Senate Budget Committee, relies on related research that the committee thrown out in June about the U.S. insurance industry's decisions to continue investing in and financing fossil fuel expansion projects that drive climate change.
In light of the damage that the widespread lack of insurance causes throughout the economy, senators sent letters to the 20 largest private sector insurance companies in California, Louisiana, Florida and Texas (a total of 40 companies) to request documents and information related to the companies' plans to address the increase in technical losses resulting from disasters climatic.
"The Committee is increasingly concerned about the potential economic consequences of an eventual large-scale decline in property values โโcaused by increased exposure to climate risks and the resulting increase in insurance premiums and decreased availability of insurance". the senators wrote. โIf such a situation were to occur, the effects on households โ and on federal revenues and expenditures โ would be quite damaging and long-lasting, as we saw during and after the 2008 financial crisis.โ
Among other requests, the senators are seeking information related to the following:
- Current consideration of the risks of climate-related extreme weather events, sea level rise, and/or wildfires when determining property and casualty insurance premiums for homes, rental units, automobiles, commercial properties, and/or crops ;
- Premium forecasts for the next five years;
- Climate-related threats to the solvency of companies; and
- A list of all counties (or county equivalents) in the United States in which the company in question has not renewed a minimum threshold of homeowners policies in the years 2018 through 2023.
The committee held a series of audiences in the economic cost of climate change. Insurance industry executives, economists, actuaries and other experts have testified that climate change could trigger cascading failures that undermine financial and economic stability. His testimony has made it clear that:
- Climate-related losses have already increased substantially and are expected to continue to increase;
- As climate-related risks increase, insurance premiums will increase and/or insurers will withdraw from at-risk markets;
- As insurance becomes increasingly expensive and/or unavailable, property values โโin affected markets will decline;
- The unavailability of the insurance will cause the affected properties to cease to be mortgageable; and
- A large-scale decline in coastal and wildland-urban interface (WUI) community property values โโwould present a systemic risk to the U.S. economy, similar to what occurred in the 2007-2008 mortgage crisis.
Letters were sent to American international group, Allied trust, American integrity, the entire state, American family, AmTrust, Auto Club Companies, AXA, Berkshire Hathaway, Chubb, CNA, CSAA, fairfax, Farmers, Florida Peninsula, First protector, Gulf States, Hartford, Inheritance, American Owners, Owners' choice, Kemper, Louisiana Farm Bureau, mutual freedom, General Mercury, On a national scale, Olympus, The trust of the people, Progressive, Safety first, Mutual refuge, Slide, State farm, SURE, marine tokyo, Tower Quarter, Travellers, Universal insurance holdings, USAand Zurich. Companies have until November 17, 2023 to respond to the committee's request.
In June, Chairman Whitehouse, along with Senators Wyden and Bernie Sanders (I-VT), thrown out an investigation into how the U.S. insurance industry assesses climate-related risks, decides to invest in or underwrite fossil fuel expansion projects that drive such risks, and prices policies that insure such projects. Although the committee is actively engaging with each of the companies and reviewing the documents they have provided, it has seen little evidence to date of meaningful industry plans to align investment and underwriting decisions with the benchmarks of the Agreement. Paris needed to avoid the worst effects of climate change.
