For years, I have been writing that the insurance industry will strongly influence the climate change debate, because its mission it to identify risks and price its policies accordingly. You can’t build a new 80 story tower stuffed with luxury condominiums on the edge of an ocean if you can’t get insurance, right? You can’t build a new 5,000 square foot residence on a flood plain if you can’t get insurance, can you?

According to a new report from Inside Track, a group of senior insurance industry professionals, all our assumptions about the insurance industry can be discarded. Someone once said the business model for insurance companies is to sell coverage and deny liability. Now there is a new wrinkle — selling coverage that excludes climate risks. Here I thought these professional risk managers would force the rest of us to confront the existential dangers we face, but that apparently isn’t so. Just like every other business, they are content to take our money while giving us less and less protection.

The insurance professionals at Inside Track wrote, “We are worried that the risk levels we are seeing either aren’t being communicated to or aren’t being properly internalized by government. Without intervention, these physical risks will translate into major economic risk. The undermining of the mortgage market drove the Global Financial Crisis. We are worried a major increase in uninsured, high-risk properties could manifest in a similar way as climate impacts intensify.”

This is some heavy duty stuff. In essence, what the Inside Trac folks are saying is that some in the insurance industry are suppressing the information they have so their customers are not aware of the dangers they face.

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