Yes, who will pay for climate change?

T

he Munich Reinsurance Company has been in the sober business of managed risk since 1880. Munich Re, as it is now known, helped pay for the devastation caused by the San Francisco earthquake in 1906, Hurricane Hugo in 1989, and the assault on the World Trade Center on September 11, 2001.

The company, which in 2014 paid out approximately $45 billion in claims and netted $4 billion in profit, employs some 43,000 people—underwriters, economists, accountants, lawyers, and scientists—all working to predict and plan for the future, and with a shared mission: to make sure Munich Re is never surprised. Risk properly calculated makes money for Munich Re; risk unanticipated could bankrupt it.

These days, the greatest unpredictable risk Munich Re faces is climate change. Like other major insurers, Munich Re follows a standard procedure to ensure its premiums are set high enough to cover natural-catastrophe claims.

Read the Jeffrey Ball story on New Republic - “Who will pay for climate change?”