Many of you know that I have been writing about the intersection of the insurance industry and climate change for almost long as this blog has existed. I have long been interested in the economic relationship between the two, as the industry responds to climate losses and, in so doing, forces homeowners and other insureds to proactively and constructively respond to climate change and its inherent property risks. Thanks to the beauty of the LinkedIn algorithm, this excellent, detailed study of the topic came to my attention yesterday. The article – “Rise of the Insurance Apocalypse” in The Lever – points out that the economic interrelationship of climate change and insurance is even more extensive than we often think, pointing out how it affects not just homeowners in risk prone areas but the very question of whether certain types of energy projects can, will or should even be built.

But it also points out something more troubling, which is seldom covered by the articles in most media about the subject, which typically simply discuss insurers retreating from a particular state so as to reduce their losses; namely, the extent to which climate related losses and exposures are threatening the very fabric of the reinsurance system on which much of the modern western economic world rests. Beyond that, it does a terrific job of sketching the history of the industry’s engagement with the problem, tracing it farther back than I have understood it to go, pointing out that “in 1973, Munich Re, one of the world’s major reinsurance firms, noticed a spike in the number of flood damage claims” and noted in a report “’the rising temperature of the Earth’s atmosphere’, due to the ‘rise of the CO2 content of the air, causing a change in the absorption of solar energy.’”

None of this is going away, and this history is worth understanding for anyone interested in the legal, regulatory and political environment that is growing up around the changes in the insurance and reinsurance industries as a result of climate losses.