Rather than debate whether climate change is happening, risk managers, brokers and insurers are taking steps to mitigate rising catastrophic losses.

Stephen Pottle, manager of risk and insurance management at Toronto's York University, cited climate change as a likely contributor to damage he's dealt with in recent years caused by temperature fluctuations, thunderstorms, flooding and hurricanes.

The extreme weather has meant higher insurance costs, Mr. Pottle said. Because the university is covered by a reciprocal, damage incurred by a member thousands of miles away—such as Hurricane Juan's 2003 assault on Canada's east coast—can mean higher premiums for the university.

While many are convinced climate change is a human-caused reality, others see the controversy as moot.

“Irrespective of the cause, climate change is happening,” said Peter Breitstone, chief executive officer of the environmental services group at Chicago-based brokerage Aon Corp. Getting involved in the climate change debate does little to mitigate increased losses caused by recent years' extreme weather and could alienate clients, Mr. Breitstone said.

Sean Mooney, an economist for Guy Carpenter & Co. L.L.C. in New York, said the broker is reacting to climate trends, such as a rise in the frequency and severity of North Atlantic hurricanes.

The National Oceanic and Atmospheric Administration projects a near-normal 2009 hurricane season. Colorado State University forecasters project 2009 will be less active than the average season from 1950-2000. Even so, “we expect the active Atlantic hurricane era that we have been in since 1995 to continue for the next 10 to 15 years,” CSU researchers said last week, citing the redevelopment of El Niño as a factor (see box, page 16).

As for why climate changes are occurring, Mr. Mooney isn't taking sides: “We're fairly agnostic about whether climate change is happening,” he said.

There's science on both sides of the issue, said Al Tobin, national property practice leader for Aon Risk Services in New York. He mentioned factors ranging from the rise in frequency and severity of hurricanes to increasing salinity of the oceans.

“We're really careful not to attribute (disasters) to climate change—you can't attribute a particular event to it,” said Paul Pritchard, corporate responsibility manager for London-based insurer Royal & Sun Alliance.

Nonetheless, weather-related catastrophes have sown fear in the insurance industry—regardless of the trend one believes is behind them.

“I know all insurance companies are afraid of another (Hurricane) Katrina,” said Mr. Tobin, who characterized the 2005 hurricane as a paradigm shift for insurance. “In every board meeting now, it gets asked, "What's your cat aggregate and how are you managing it?'”

Others say climate change has dire consequences for the world.

A recent report by the Geneva-based International Assn. for the Study of Insurance Economics warned, “Insufficient adaptation (to climate change) could threaten the concept of insurability itself.” In the short-term, climate change will “(necessitate) risk quantification approaches that include a forward-looking view of risk...not purely grounded in historical experience.”

It's a reaction evident in the industry's increased reliance on weather modeling to forecast events and their losses, Mr. Tobin said.

Andreas Spiegel, senior climate change adviser for Zurich-based Swiss Reinsurance Co., said the company has acknowledged findings of the Intergovernmental Panel on Climate Change, which in 2007 concluded that climate change is occurring and greenhouse gas emissions are contributing to it. “I wouldn't doubt climate change is increasing losses,” he said.

Swiss Re has taken steps to fight climate change, such as sponsoring Climate Week in New York to reach out to world leaders before December's U.N. Summit on Climate Change in Denmark, Mr. Spiegel said.

Industry advocacy groups are getting involved as well. The Reinsurance Assn. of America is collaborating with the Reston, Va.-based National Wildlife Federation and the Arlington, Va.-based Nature Conservancy to preserve natural features such as barrier islands in the Carolinas that mitigate climate-caused damage, said Frank Nutter, RAA president. Environmental groups hope to save the islands' wildlife habitat, while the RAA seeks to abate future coastal hurricane losses.

Catastrophes caused $52.5 billion in insured losses in 2008, according to a Swiss Re sigma study. “Statistics confirm a trend towards an increase in the number and costs of natural catastrophes and man-made disasters,” the study said.

Those in the insurance industry see environmental issues as an opportunity and a threat, and are altering how they manage their own risk.

As some insurers await environmental legislation before building options around climate change, brokers have helped them devise ways to serve buyers' needs, Mr. Breitstone said. For example, Aon helped a client insure a carbon sequestration project, in which carbon dioxide is stored in the ground to prevent it from polluting the atmosphere. Based on a risk analysis, Aon's engineers and underwriters were able to characterize the risks in terms that fit insurers' current offerings, helping the client find coverage.

Brokers and insurers also have been collaborating to offer “green” endorsements, which supplement policies and enable buyers to rebuild damaged properties to enhanced environmental standards.

Reinsurers are preparing as well. Swiss Re has used catastrophe bonds to transfer risk to capital markets and employed index-based insurance to better protect against weather-related risks, Mr. Spiegel said.

For RSA, adapting to clients' needs and preventing losses are two tasks strongly affected by climate change, Mr. Pritchard said. For losses, he said the company is monitoring trends, such as flooding in England in the past decade, that could be attributable to climate change.

For Mr. Pottle, trends indicate increased losses will continue, regardless of whether or not they are due to human-caused climate change.

“It's part of the situation. Is it the whole situation? Probably not,” Mr. Pottle said. “It could just be bad luck.”