The headlines are relentless, loudly proclaiming that climate-fueled extreme weather has caused an insurance crisis, reflected in dramatic rate increases for homeowners and businesses. Some warn that total economic collapse may soon follow.
But as is often the case when it comes to apocalyptic warnings related to climate change, real-world data don’t support the narrative.
In reality, the insurance industry, which provides coverage related to hurricanes, fires and other extreme events, is enjoying a streak of record profits.
Defenders of high premiums say it’s because it’s much more expensive to insure homes because of climate change.
But the recent spike in insurance prices is much more likely due, in significant part, to political requirements across the industry that financial companies consider “climate risk,” and the corresponding suite of risk modelers established to meet the newly created demand.