Prøve GULL - Gratis
CLIMATE'S UNSOLICITED PAYOUT
Down To Earth
|February 16, 2025
Rising weather extremes is destabilising the insurance industry, driving up premium prices and pushing insurers out of high-risk markets. The crisis is also spurring re-invention of insurance sector.
PROBABILITY IS business-critical for the insurance industry. The insurer applies the "probability" factor to assess and value the risks, and sets the premium at a rate that earns them a profit even after paying out claims. When a large number of individuals or businesses subscribe to insurance policies, the risk gets shared by all, which makes the insurance premium affordable. But what happens when "probability" loses its meaning-or, the "how likely something is to happen" becomes the "all likely to happen"? The business of insurance collapses. In the face of high payouts, insurers increase the premiums. This makes insurance unaffordable for individuals and businesses, even discouraging them to buy policies. After sustained losses, insurers also quit the business. At present, the insurance industry is experiencing a similar downturn because of a new risk pattern that has redefined the game of probability: climate change.
In a rapidly warming world, extreme weather events such as storms, cyclones or hurricanes, floods and wildfires have become not just frequent and ferocious but also highly damaging. Probability of a disaster hitting a region is no longer once-in-decades but an annual occurrence. This has hit the insurers that offer coverage or financial protection against losses caused by weather-related events. One could even argue that the insurance is the unconventional tipping point of climate change. "We have the reality of climate change, the inconvenient truth that it's not just some conceptual political debate. It's having an impact and insurance is one of the places where we are starting to feel the pain," says Amy Bach, executive director of United Policyholders, the US-based insurance consumer advocacy group.
The wildfires this January in Los Angeles county of California, US are a sombre reminder of the insurance crisis brewing in a changed climate.
Denne historien er fra February 16, 2025-utgaven av Down To Earth.
Abonner på Magzter GOLD for å få tilgang til tusenvis av kuraterte premiumhistorier og over 9000 magasiner og aviser.
Allerede abonnent? Logg på
FLERE HISTORIER FRA Down To Earth
Down To Earth
Collective denial
A decade on from the Paris Agreement, countries are planning more fossil fuel production than before, putting global climate ambitions at increasing risk
4 mins
October 16, 2025
Down To Earth
BUILT TO BINGE
Over the past few decades, food companies have exploited basic human instincts to peddle ultra-processed products. Engineered to hijack the brain's reward system, these foods are silently fuelling a new addiction epidemic, and driving rising rates of obesity and chronic diseases. Urgent policy action is needed to reclaim control over our food environment.
19 mins
October 16, 2025
Down To Earth
Another farmer quits
THIS DUSSEHRA, Pitabasha did not go for the customary sighting of the Indian Roller, or tiha, as it is called in Odia. The bird is believed to grant wishes, and every year thousands of people flock to farms, fields and forests hoping to glimpse it and make a wish. But the 30-year-old farmer from Matupali village in Odisha stayed back. From that day, he also stopped calling himself a farmer.
2 mins
October 16, 2025
Down To Earth
What the H-1B visa angst reveals about India
It is odd that India strenuously promotes the exodus of its tech talent while failing to foster innovation at home
4 mins
October 16, 2025
Down To Earth
REDUCED TO INSIGNIFICANCE
On October 12, the Right to Information (RTI) Act completed 20 years. Activists who monitor the Act, and former information commissioners, say that amendments by successive governments have rendered the law toothless. As per Central Information Commission's latest annual report (2023-24), the number of RTI applications rejected in the year was over 67,615—the highest ever. BHAGIRATH curates a conversation on what went wrong with the law that was sought to bring transparency and accountability in governance.
14 mins
October 16, 2025
Down To Earth
'Depopulation would mean fewer people contributing to advancement of knowledge'
Trends show that in a few decades, global population will begin to shrink. Once depopulation starts, no one knows how to stop it in a sustained way, write DEAN SPEARS and MICHAEL GERUSO, associate professors of economics, University of Texas at Austin, US, in their recent book, After the Spike. The authors, who are also economic demographers, argue that population decline will be detrimental to global progress and that a smaller population would not necessarily be better for the environment. In an interview with ADITYA MISRA, they say that the time to talk about depopulation is now because the search for a solution could take decades. Excerpts:
5 mins
October 16, 2025
Down To Earth
Rebirth of Sukapaika
A cardiologist revives a dying river in Odisha with help from 425 riparian villages
2 mins
October 16, 2025
Down To Earth
Monsoon withdrawal stalls after early start
AFTER UNLEASHING unusually heavy spells of rain across northwest India, the southwest monsoon began withdrawing three days earlier than normal, on September 14.
1 min
October 16, 2025
Down To Earth
Despair follows deluge
As floodwaters recede in Punjab, communities are left with ruined fields, lost livelihoods and an uncertain future. VIVEK MISHRA travels through the seven flood-hit districts to gauge the scale of the crisis.
6 mins
October 16, 2025
Down To Earth
Bone dry to soaking wet
Farmers in Marathwada were ill-prepared for the intense rainfall that hit the perennially water-starved region.
4 mins
October 16, 2025
Listen
Translate
Change font size