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Insurers turn up heat on global warming


Global warming is an abstract phenomenon to most people.

To many, it is the tongue-in-cheek scapegoat for a current spell of hot temperatures or stormy weather. Some see it as a cause associated with liberal politicians, Hollywood activists and tree-hugging environmentalists that remains far beyond the mainstream. Others think it is a crackpot theory advanced by scientists out of step with the truth. And even among people who believe that climate change is a real phenomenon, many have no idea what this might mean to them on a personal level.

For starters, it will mean higher insurance premiums and more restrictive policies.

Long before the average person faces an increased frequency and severity of weather events such as hurricanes, rising sea levels, the spread of new pandemics and more, they will feel the effects of climate change in their insurance coverages with as much difficulty as acknowledging an inconvenient truth.

Even though most businesses and governments will take years to act on the threats posed by global warming, underwriters already are starting to stake out their position. Obviously the industry does not wish to foot the property insurance bill for a likely increase in weather-related losses. If the stakes seem high in disputes over Hurricane Katrina flood losses, consider how bad it will be if sea levels rise as predicted and threaten pretty much all coastal property.

Insurers and reinsurers also wish to minimize their exposure from providing liability insurance to companies that later could be blamed for having contributed to global warming. There are several lawsuits already under way against industries, such as utilities and automakers, whose businesses are alleged to have contributed to global warming. The costly lesson of covering asbestos manufacturers and polluters long after awareness of their potential harm was known hasn't been forgotten.

Before your coverage disappears faster than the Antarctic ice shelf, adopting some simple risk reduction strategies might help to make you a more attractive risk.

If your company currently is situated within 10 miles of a coastline or on an island, explore how costly it would be to convert your headquarters into an offshore oil derrick. Or, relocate to North Dakota. The winters will be fierce, but your risk of being hit by a hurricane drops to zero.

Eliminate air conditioning this summer. Not only will this get you acclimated to the new average global temperature, but also this will stimulate copious amounts of perspiration, which is nature's way of cooling the body. It also will reduce demand on coal power plants and lower your energy bills.

Exchange your corporate automobiles for bicycles, skates and other self-powered modes of transportation. This will cut exhaust emissions, avoid tanks of $4 a gallon gasoline, improve employee wellness (after an initial period of employee soreness) and nix fleet insurance premiums.

Avoid flying for business or vacation travel, and instead work on your conference call skills. Planes not only generate far more exhaust and consume much more fuel than cars, they also have been linked to the artificial creation of cirrus clouds, which apparently are to be avoided.

Go beyond environmentally friendly strategies such as buying fluorescent light bulbs to going without light bulbs entirely. Have you ever noticed how much light your computer screen gives off? Keep the power switch off and save a buck.

Convert your cafeteria to a sushi bar. Cooking food or powering vending machines requires energy, whereas raw fish will be more accessible if sea levels rise outside your door, and only requires the skills of a special chef and lots of wasabi. Sushi is also trendy, giving your firm an edge in the market for Generation X, Y and Z labor.

Hopefully, these suggestions will stimulate your own creative responses to becoming a more attractive risk to insurers as well as a more responsible corporate citizen. And remember: Whether you believe in global warming is beside the point. As long as your insurer believes, it is real.