Until recently, world opinion has been divided: are current weather trends the result of long-term climate change or not? And what role, if any, has climate change played in the recent spate of weather-related catastrophes? The facts are often confused by politics and by a wealth of different – and sometimes conflicting – evidence from a range of scientific and other sources.
However, a growing body of expert opinion now agrees that the climate is changing – and that human activity is playing a major role. Most worryingly, the latest science suggests that future climate change may take place quicker than previously anticipated.
There will continue to be much argument, over both the extent of future climate change and its likely impact on society. But whatever the facts, there could hardly be a debate of greater importance to the insurance industry.
The past few years highlight bluntly the cost of weather-related catastrophes for the global economy and the insurance industry in particular. The industry’s response has proven that it is financially strong and well-equipped to respond to these financial shocks.
It is equally clear that, so far, the industry has not taken changing catastrophe trends seriously enough. Climate change is likely to bring us all an even more uncertain future. If we do not take action now to understand the risks and their impact, the changing climate could kill us.
In publishing this report, it is not Lloyd’s intention to take a particular position, or to support a specific scenario. We simply aim to present the facts from the most reliable sources in a way which we hope will be helpful for those who trade in, and with, our market. We also want to generate debate about the specific steps which we might take as an industry to prepare for the increasing volatility of the climate.