Engineering and the Insurance Industry

From No climate-change deniers to be found in the reinsurance business - link:

"In Munich Re’s offices, there wasn’t much debate as the claims cheques flew out the door: The higher frequency of extreme weather events is influenced by climate change; and recent climate change is largely due to burning hydrocarbons. “I’m quite convinced that most climate change is caused by human activity,” says Peter Höppe, head of geo-risks research at Munich Re.

His statement is not remarkable, even though the big American insurers don’t like to put the words “climate change” and “anthropogenic” in the same sentence. What is remarkable is that Munich Re first warned about global warming way back in 1973, when it noticed that flood damage was increasing. It was the first big company to do so—two decades before the Rio de Janeiro Earth Summit triggered a planetary anxiety attack by publicizing the concepts of “global warming” and “climate change.”

Munich Re, Swiss Re and the other reinsurers, along with the Lloyd’s of London insurance market (unrelated to the bank of the same name), stand out from the rest of the business world by being on the same page as scientists on climate change. What’s more, while most of the planet has its head in the sand about the reality and requirements of global warming, the reinsurance industry has already moved on to mastering the math on other catastrophes.

Like any industry, the reinsurers and insurers stay in business by not losing money year after year. To accomplish that, they have to turn ever-greater portions of “unexpected” losses stemming from the weather into “expected” losses, which requires that they become adept at risk modelling."