I have written extensively on the relationship between insurance and climate change, going back to early comments and work on the subject by Lloyds‘, and continued to address it in the context of insurers withdrawing from markets in the face of climate related losses. I am known for saying that the insurance industry is, in fact and in many ways, environmentalists’ best friend, in that the industry’s economic interest in limiting the damaging impact of climate change aligns with the idealistic goals of many environmentalists. In many ways, the role of the insurance industry in this issue mirrors the extent to which various economic actors have a financial stake in transitioning the economy to a greener future, including wind, solar and other energy producers and investors. I am fond of the saying, which I read elsewhere, that someone once said that Marx was wrong about a lot of things, but he was right that everything is economics. The insurance industry has a huge economic motivation and role to play in the discussion and handling of climate change, and the industry both is and should be doing so.

In my discussions and writing on this topic, I have generally focused on discrete issues, such as the relationship between climate change and homeowner insurers departing from certain markets. It all ties, though, to my general view that at a macro scale, the insurance structure is the bedrock of large scale trade, investment and economic activity throughout the developed world, and that the economic impacts of climate change on the insurance industry threaten that bedrock foundation.

But I am just a lone blogger and a practicing lawyer. In the past week or so, though, a senior official with a major insurer came right out and said the quiet part out loud (as the cliché goes), explaining that climate change was moving to the point where it threatened massive disruption – from a purely economic perspective – to the insurance industry and to insurance coverage, with potentially devastating corollary effects on capitalism as practiced today (if anything, I am understating his warning). As he puts it, climate change’s impact on the insurance industry alone – without accounting for any other effect it may have – is “a systemic risk that threatens the very foundation of the financial sector.” Personally, I don’t much disagree with him, particularly as someone who has followed this issue for years but read his original LinkedIn article and the Guardian’s news coverage of it and decide for yourself.