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Two recent scientific reports should put global warming back on the front burner of the insurance industry's consciousness, and maybe its conscience. Both articles show that the world's ice sheets are melting quicker than anticipated, leading to higher sea levels and possibly more dangerous climatic patterns, including hurricanes in the Atlantic.

In the latest study, published in the March 2 online issue of Science Express, researchers from the University of Colorado at Boulder found that the Antarctic ice sheet is losing 36 cubic miles of ice each year. They used NASA satellite technology to measure the ice mass of the continent between April 2002 and August 2005. Previously, experts had believed that Antarctica would gain ice mass this century.

Both studies show just how warm temperatures have gotten at the Earth's top and bottom.

"The warming at the poles is the fastest warming on the planet," said Dr. Julian E. Salt, director of the Climate Solutions Consultancy, a firm that advises insurers and other corporations on how to manage the risks of global warming.

Salt, who recently lectured on the topic at the Insurance Institute of London at Lloyd's, suggested that such temperature jumps--and the resultant melting of the ice caps--could have phenomenal effects upon the global insurance community.

He painted a picture that could blow insurers away: The melting ice of Greenland dilutes the salt-water currents of the Gulf Stream in the North Atlantic; the Gulf Stream can't do one of its main jobs--transporting heat from the equator northward; warm waters then are deflected to waters off West Africa, where they brew up stronger cyclones for the U.S. hurricane season.

Salt figured that as much as a 30 percent reduction in the flow of the Gulf Stream has already been seen just in the last 12 years. And global warming, he said, is near a tipping point.

"My main message is that unless the insurance industry does something radical soon," Salt wrote in an e-mail interview, "they will go out of business by midcentury, or earlier. Katrina was a wake-up call, and there will be more $100 billion storms.

At Lloyd's, the host of Salt's recent speech, a spokesperson said: "Climate change is clearly an important issue for debate and one which is of great importance to the insurance industry. At Lloyd's, we are currently taking a good look at the scientific research available to assess how we and the wider insurance industry might be affected and what action we need to take.

At its quarterly meeting in March in Orlando, Fla., the National Association of Insurance Commissioners voted to form a task force to study the impact of climate change on the U.S. insurance industry and ways to mitigate these impacts.

April 15, 2006

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