CNNMoney/Fortune: Insurance companies take on global warming

[DeepModem Mom]

Insurance companies take on global warming
It's past time for the industry that rated vehicle safety and lobbied for building codes to address climate change, says Fortune's Marc Gunther.
By Marc Gunther, Fortune senior writer
August 23 2006

....some insurers are worried by the threat to their business posed by climate change. And they are starting to see what, if anything, they can do about it....

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AIG....has hired an economist who formerly worked for the nonprofit Environmental Defense to coordinate its climate change activities. Among other things, it is making private equity investments - it wouldn't say how much - in projects and technologies that reduce or offset greenhouse gas emissions.

Fireman's Fund, a unit of Allianz AG, this fall plans to introduce commercial insurance policies designed to support and encourage the development of "green" buildings that save energy and reduce emissions of greenhouse gases....The CERES report, which is called From Risk to Opportunity: How Insurers Can Proactively and Profitably Manage Climate Change, argues that the industry has a long-term interest in addressing the risk of global warming, and that it can make money by designing products designed to mitigate against climate change.

Some of the new initiatives are quite complex. Several insurers, for example, are developing products like "wind derivatives," which are designed to reduce the risks of building wind energy projects.

Other ideas are simpler. Pay-as-you-drive auto insurance offers reduced rates to car owners who drive less. (This makes business sense, of course, because their accident risks are lower.) The concept has been around for years but General Motors' GMAC insurance unit now couples a pay-as-you-drive policy with its OnStar global-positioning system that accurately measures miles driven. The upshot is that drivers who use their cars less and produce fewer greenhouse gases pay lower rates....

http://money.cnn.com/2006/08/22/news/economy/pluggedin_gunther.fortune/index.htm?cnn=yes

[GOPBasher]

1. Nice. Most companies have a vested interest in mitigating climate change.

Only energy companies who use fossil fuels have the opposite interest.