Social and environmental risks have supplanted economic ones as issues of greatest concern among respondents to the Global Risks Perception Survey. The survey was completed by almost 750 members of the World Economic Forum’s global multistakeholder community and the results analyzed in the World Economic Forum 2017 Global Risks Report, which was published by the World Economic Forum with support from Marsh & McLennan Companies and other partners.

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Social and environmental risks have supplanted economic ones as issues of greatest concern among respondents to the Global Risks Perception Survey. The survey was completed by almost 750 members of the World Economic Forum’s global multistakeholder community and the results analyzed in the World Economic Forum 2017 Global Risks Report, which was published by the World Economic Forum with support from Marsh & McLennan Companies and other partners.

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Disruptive shifts in technology, geopolitics, societal expectations, and economic patterns are creating instabilities that are directly impacting events in the world today. The World Economic Forum’s eleventh Global Risks Report highlights the issues that will exacerbate volatility and uncertainty over the next decade - while also presenting opportunities for governments and businesses to build resilience and deliver sustainable growth.

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Casualty catastrophe occurrences have become increasingly common over the past decade. The recent 2008 financial catastrophe is the easiest to cite, due to its sheer size and the fact that it continues to unfold even today. But, there have been many others. The collapse of the “dotcom economy” led to scandals around initial public offering laddering and equity analyst conflicts of interest. Accounting firms were not alone in suffering financial loss related to such debacles as Enron, WorldCom, Tyco and Adelphia. While insured losses did not reach those of property catastrophes, economic damages were profound. Enron’s loss of USD66 billion in market capitalization alone - not including the economic damage caused to other companies - was more than double that of Hurricane Ike (approximately USD30 billion). The financial catastrophe is estimated to have caused economic damage of above USD1 trillion, with more likely to follow. When considered in the context of the Deepwater Horizon industrial accident, the casualty catastrophe that unraveled from the largest US offshore energy event over the past 40 years was by no means remote. Beyond the initial property loss of the actual drilling rig, liability risk in paying claims continues to extend and ripple throughout the supply chain involved as well as the environmental impact to numerous coastal and commercial businesses. Asbestos litigation, perhaps the longest casualty catastrophe on record, has paid out over USD70 billion and by some accounts may be entering its third wave. Therefore, asbestos is an emerging crystalizing risk that needs to be continuously monitored, measured and modeled for those who continue to be exposed to it.

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Here we review recent GC Capital Ideas stories focused on climate change.

Guy Carpenter Asia-Pacific Climate Impact Centre Publishes New Annual Report: The Guy Carpenter Asia-Pacific Climate Impact Centre (GCACIC), a joint initiative of the City University of Hong Kong and Guy Carpenter, released its fifth annual report presenting the highlights of the GCACIC’s research activities from the past year. The report details the findings of 16 projects conducted by the GCACIC, which focus on climate problems in the Asia-Pacific region as well as on a global scale.

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Third U.S. Climate Report Is Available: The White House released the Third U.S. National Climate Assessment report on May 6, 2014. The report was constructed with input of many U.S. scientists and coordinated by a cross section of U.S. interests including the energy sector.

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Responding to Climate Change:  It is vital for (re)insurers to consider how climate change could impact future losses. Global warming potentially poses a serious financial threat to the insurance industry with implications for catastrophe risk perception, pricing and modeling assumptions.

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Climate Change: A Look into the Future: Global climate models project a best estimate of a further two to four degree (Celsius) increase in the mean temperature of the Earth by the end of this century. Although this may seem insignificant on an intuitive level, the resulting impacts are of significant concern. Sea-level rise is the most significant threat for coastal areas as a result of melting glaciers. Apart from this threat, changing weather patterns will result in drought and inland flood threats for some areas.

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Global Warming: Adaptation Measures: The IPCC publications represent scientific consensus among many of the world’s top scientists (and scientific consensus is difficult to achieve). Their findings are generally consistent with the broader scientific literature.

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Global Warming: Losses: Economic losses resulting from natural disasters increased from USD75.5 billion in the 1960s to USD659.9 billion in the 1990s (IPCC AR4, 2007 - Working Group II, Section 1.2.8.4). Insured losses have also increased, and “the dominant signal is of significant increase in the values of exposure” (IPCC AR4, 2007 - Working Group II, Section 1.3.8.4). Furthermore, the IPCC states that “failure to adjust for time-variant economic factors yields loss amounts that are not directly comparable and a pronounced upward trend for purely economic reasons.”

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The Guy Carpenter Asia-Pacific Climate Impact Centre (GCACIC), a joint initiative of the City University of Hong Kong and Guy Carpenter, today released its fifth annual report presenting the highlights of the GCACIC’s research activities from the past year. The report details the findings of 16 projects conducted by the GCACIC, which focus on climate problems in the Asia-Pacific region as well as on a global scale.

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Guy Carpenter published a new report highlighting emerging risks facing the (re)insurance sector, including cyber risk, climate change and space risk. The report seeks to identify pressing emerging risks confronting the sector, as well as analyze their implications on businesses and (re)insurers. 

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The Guy Carpenter Asia-Pacific Climate Impact Centre (GCACIC), a joint initiative of Guy Carpenter and City University of Hong Kong, today released its fourth annual report presenting the findings of the GCACIC’s research activities from the past year. The report details the findings of 22 projects conducted by the GCACIC, which focus on climate problems in the Asia-Pacific region as well as on a global scale.

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A fire at a fertilizer plant in West, Texas (about 80 miles southeast of Dallas) sparked a deadly explosion that killed an estimated five to 15 people and injured more than 160 on Wednesday April 17. According to reports, the explosion occurred at approximately 8:00 PM CDT (01:00 UTC). Prior to the blast, a fire was reported at the plant. A reported 50 to 75 homes were destroyed, as well as a 50-unit apartment complex. A nursing home and middle school were also reported to have severe damage. While officials have not determined a cause for the explosion, they do not believe that foul play was involved.

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David Lewin, Managing Director
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EU Directive and Italian Statutory Provisions

With EU Directive n.35/2004 on Environmental Liability (ELD), the European legislator aimed to establish a harmonized legal framework based on the principle that “the polluter pays.” The main objective of ELD is to prevent and remedy environmental damage, which is defined as damage to protected species and natural habitats (nature), damage to water and damage to land (soil).

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