Capital Markets Come To The Rescue Of Weather-related Insurance Market

摘要

As threats mount from hurricanes, floods, drought, and migrations of people to risk-prone cities, insurers will have to turn to catastrophe bonds, weather derivatives and other market instruments to spread the enormous risks. The great majority of world citizens now recognize that global warming is real. Climate change, along with increasing incidents of major storms, flooding and drought, could profoundly affect our lives in coming years. And those changing weather patterns hold deep implications for insurance companies. "There has been a 15-fold increase in weather-related insurance losses in the last 30 years," says Olaf Novak, head of cat (short for catastrophe) management at Allianz Re in Munich. "What we are facing is an increase in frequency and severity." In its fourth assessment report, Climate Change 2007: Synthesis Report, the United Nations' Intergovernmental Panel on Climate Change, or IPCC, states that "warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global average sea level."