Insurance companies are in the business of making perceived risks seem much larger than actual risk. Their profits are directly impacted by increasing the risk perceptions of the party seeking insurance. It is not surprising that they exaggerate the dangers of whatever is being insured against. To be “alarmist” for an insurance company is just good marketing. However much of their marketing and publicity is presented under the cloak of “scientific research”. Any report from an insurance company about future risks and purporting to be an “objective” or “scientific” study needs to be discounted and taken with a very large shovel of salt. Yet, the media often swallow such publicity and merely reproduce their reports with little effort to see through the conflicts of interest.
I have posted earlier about Munich Re and their attempts to suggest that global warming will increase the frequency of natural disasters. Anything to increase the perceptions of risk.
Based on a request for investigation from JunkScience.com, Nature has forced MIT’s Kerry Emanuel to disclose his employment with insurance companies as a conflict of interest.
In the Feb. 14 Nature Climate Change study “Physically based assessment of hurricane surge threat under climate change,” of which Emanuel is a co-author, the “Additional Interests” section disclosed:
The authors declare no competing financial interests. However, in the interests of transparency we confirm that one of us, Kerry Emanuel, is on the boards of two property and casualty companies: Homesite and Bunker Hill, and also on the board of the AlphaCat Fund, an investment fund dealing with re-insurance transactions. In all three cases, Dr Emanuel receives fixed fees but owns no stocks or shares. Dr Emanuel does not stand to make any personal financial gain through these directorships as a consequence of the reported findings.
There was obvious reluctance in the disclosure from the wording (“no competing financial interests” even though insurance companies are gaming global warming alarmism) to the fact that, despite our asking, we had to find out about the disclosure on our own initiative — i.e., after our initial exchange with Nature, the journal editors stopped communicating with us.
JunkScience also reported that the Consumer Federation of America says in a new report:
…. Although insurers have become adept at shifting the cost of catastrophe losses to others, they still use catastrophic weather events to advocate for measures that would shift risk even more, such as higher rates, or putting more policyholders in pools or created taxpayer-supported entities. Thus, many consumers exposed to catastrophe weather risk are also vulnerable to insurer attempts to unjustifiably increase rates or hollow out coverage…