U.S. Insurers Lag Euro Counterparts in Climate Rating Report

June 3, 2021 by

Legislation to provide farmers with tools to help New York efforts to mitigate the impacts of climate change is making its way through state Legislature.

The Soil Health and Climate Resiliency Act passed the Assembly unanimously last week, and was sent to the Senate.

The act establishes a Soil Health Initiative, a Climate Resilient Farming Initiative and a Research Initiative through the New York Department of Agriculture and Markets.

The initiatives are intended to scale sustainable soil health practices to increase carbon sequestration and help the state meet climate goals while improving water quality and promoting resilience.

Among the act’s proponents are state Sen. Michelle Hinchey and Assemblywoman Donna Lupardo.

Hinchey, who chairs the Senate Agriculture Committee, said the bill will codify “soil health and climate-resilient farming practices to safeguard our food supply, water, and air quality for generations to come.”

The bill charges the New York Department of Agriculture with creating voluntary science-based standards for soil health and enable farmers to take advantage of private, state, and federal funding to implement farm management practices that promote soil health.

Climate Change Specialists

Cities across the U.S. have launched new programs focused on dealing with extreme weather, reflecting the growing impacts of climate change on local communities, according to a Reuters article in Insurance Journal.

Since 2019 at least 30 U.S. cities have taken actions like hiring specialists to combat the impact of extreme weather, including Phoenix, Houston, Louisville, Nashville and Oakland. Many of those cities have created posts and initiatives to deal with heat waves, wildfires or flooding, the Adrienne Arsht-Rockefeller Foundation Resilience Center, based at Washington D.C.’s Atlantic Council think tank, told Reuters.

Tucson has hired a climate change advisor and a city forestry advisor to supervise the planting of 1 million trees around the Arizona desert city by 2030, Miami named a heat officer, and Los Angeles appointed a climate emergency mobilization director.

“Local government officials have to respond to it,” said Kathy Baughman McLeod, the head of the Resilience Center, which promotes solutions to climate impacts, told Reuters.

Insurer Climate Ratings

Most of the world’s largest insurers aren’t adequately addressing systemic risks such as climate change and biodiversity loss, according to report published by nonprofit ShareAction.

ShareAction gives the lowest mark – an E – to 46% of 70 of the world’s largest property/casualty and life and health insurers for their sustainability practices.

The report looks even worse for U.S. insurers, ranking them lowest, according to an article by Insurance Journal International Editor L.S. Howard.

Nationwide, Genworth Financial, American International Group, Allstate, and Chubb appeared in the bottom 10 of the ranking.

European insurers AXA, Allianz and Aviva lead the ranking of P/C insurers, each receiving an A rating.

“All three have climate policies that cover their underwriting activity, as well as restrictions on financing coal companies and those in breach of human rights,” explained ShareAction.

Nine of the top 10 P/C insurers were European-based companies: AXA, Allianz, Aviva (all with A ratings); NN Group (BB rating); Canada’s Desjardins Insurance (B); Generali (B); Zurich Insurance (CCC); Swiss Re (CC); Munich Re (CC); and Achmea (CC).

Other reports in the past have called out U.S. insurers for lagging on climate change initiatives compared to their European counterparts.

Miami Seawall

The U.S. Army Corps of Engineers has proposed building a massive seawall up to 20 feet high to protect the South Florida coast from storm surge.

The Corps proposed the wall in a first draft of a study that’s now under review. It calls for building six miles of wall mostly inland, which would run parallel to the coast through neighborhoods, the Seattle Times reported.

The article this week noted that the $6 billion proposal remains tentative and is at least five years off.

The Corps focused on storm surge made worse lately by stronger hurricanes and higher sea levels. Other parts of the draft plan include surge barriers, fortifying sewer plants and fire and police stations, elevating or flood-proofing thousands of businesses and homes, and planting some mangroves to provide a first line of defense against flooding and erosion, the Seattle Times reported.

Miami Beach last year began exploring a way to help residents cover the cost of floodproofing their properties from heavy rains and high tides made even higher by sea level rise

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