Allianz SE Estimates 5X Increase In At-Risk Property On US Atlantic Coast From $1.35 Trillion Today

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Nov. 23 (Bloomberg) -- Allianz SE, Europe’s biggest insurer, and the WWF said climate change is pushing the world closer to temperature thresholds that could unleash devastating environmental, social and economic changes.

“Changes related to global warming are likely to be much more abrupt and unpredictable, and they could create huge social and environmental problems and cost the world hundreds of billions of dollars,” Allianz and the WWF said in a statement today. They called for “immediate climate action.” According to the report, the impact of surpassing those temperature thresholds, or tipping points, on people as well as economic assets “have been underestimated so far.” The report was released two weeks ahead of the Dec. 7-Dec. 18 United Nations-sponsored climate summit in Copenhagen.

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The insurance industry “could be too small to handle all future risks related to natural disasters, capital markets need to play a more active role with instruments such as catastrophe bonds,” he said. Today “an estimated $1.35 trillion in values are at risk on the U.S. Northeast coast,” said Olaf Novak, head of risk management related to natural disasters at Allianz. At higher sea levels, this amount could be five times more, he said.

Insurers’ weather-related costs are rising worldwide. Allianz has estimated that from 2010 to 2019 average annual insured losses from weather-related disasters could grow to $41 billion. Weather-related disasters cost insurers an average of $33.1 billion a year between 1999 and 2008, according to the Insurance Information Institute.

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http://www.bloomberg.com/apps/news?pid=20601086&sid=akRSh6iAiGPs