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By MATTHEW BRODSKY, senior editor/Web editor of Risk & Insurance®

A few weeks ago, a top executive at a name-brand U.S. commercial property/casualty carrier wondered aloud to Risk & Insurance® about man-made climate change. How about how cows and dogs produced more CO2 than automobiles? Or how one of the most eminent hurricane experts--Dr. William Gray of the famed (and sometimes accurate) forecasting outfit at Colorado State University--is an outspoken skeptic? And this was before the "Climategate" e-mail hack. Doubtless many other higher-ups, and insurance professionals all down the ladder, feel the same way.

But in this same industry sit organizations at the forefront of the climate-change issue, which have worked together and on their own to promote understanding of the science and to galvanize political and business action to mitigate and adapt to the world's changing climate. These organizations have also kept an eye on, and made their voice heard, at the world conference that took place over the last two weeks in Denmark.

News coming out of the last days of the COP15 United Nations Climate Change Conference in Copenhagen reveals the realities of getting 193 countries to agree to something so monumental, even with President Barack Obama on-site. Besides, expectations leading up to the event weren't that action would take place, according to an AP report, but that more planning for action would.

Insurers that spoke to Risk & Insurance® on the topic echoed this tempered, but still optimistic, outlook for Copenhagen.

Ernst Rauch, head of Munich Re's Corporate Climate Center, said on Thursday that he was "moderately optimistic" about Copenhagen. He didn't expect a treaty but a global agreement to continue to work toward limiting global temperature increases to 2 degrees Centigrade.

At Lloyd's, Trevor Maynard, the manager of its emerging risks team, hesitated to make any predictions for the conference's end result, considering how "many plates are spinning and they're trying to keep them all going."

What needs to happen, according to Mark Way, head of Swiss Re's group-level sustainability initiative in the Americas, is an emission target and a framework to monitor and accomplish it, as well as a focus on adaptation, which is "absolutely essential" for the insurance industry.

"We know we're in the front lines of the various kinds of damage that can arise from climate change," said Maynard, whose employer is a participant in ClimateWise, a global initiative started by Prince Charles whose 40+ members are a who's who of global insurers. "There are so many ways that we can be impacted by it, almost just limited by your imagination."

That also can explain why leading climate change experts in the insurance business are not deterred by the politicalization of the issue, or by the recent Climategate situation, where hackers released to the public e-mails from the University of East Anglia's Climate Research Unit supposedly calling into question the science.

Though Rauch in Germany admitted he was not familiar with the content of the e-mails, he dismissed doubt.

"I do not have any indications that the results are biased in any direction," he said. "The scientific outcome of the IPCC matches extremely well with our own findings."

The IPCC is the Intergovernmental Panel of Climate Change, the leading worldwide body for the assessment of climate change, whose 2007 report is essentially the best, if not a conservative, understanding of the science and earned it the 2007 Nobel Peace Price.

As for Munich Re's own findings, the reinsurer started its own climate change initiative in 1973. Back then, the company already saw something troubling in its natural catastrophe loss data.

"In this data set, we could see changes already in the 70s that could not be explained only by socioeconomic factors," he said.

More than 30 years later, some are still not convinced. Rauch has seen this skepticism in the industry in the United States. But in the last year, he has also seen change.

"Over the last the year, they are much more open," he said.

"People who have taken the time to look into this ... they very quickly become almost evangelical about needing to do something about the problem," said Maynard.

Thus, he implores his peers on the other side of the dichotomy to take the time to read reputable sources on climate change. Afterward, he promised, you will not be anything but "worried."

Ready to argue about what exactly is a "reputable" source?

"Frankly, to justify the kind of adaptation measures that need to be taken, you don't even need to believe in climate change," Way said, pointing to the recent "Shaping Climate-Resilient Development" report, in which Swiss Re participated, showing that, even as the climate stands today, weather-related events put as much as 12 percent of Gross Domestic Product at risk in some localities.

December 18, 2009

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