Fossil fuels are an insurance disaster
Heatwaves, mold, and plastic pollution pose new risks to businesses and insurance companies, a new report by reinsurer Swiss Re warns. What do these things have in common? Fossil fuels make matters worse. They release the greenhouse gases warming our planet and are the primary ingredients for plastics, of course. Swiss Re’s annual report flags […]
Heatwaves, mold, and plastic pollution pose new risks to businesses and insurance companies, a new report by reinsurer Swiss Re warns. What do these things have in common? Fossil fuels make matters worse.
They release the greenhouse gases warming our planet and are the primary ingredients for plastics, of course. Swiss Re’s annual report flags new or changing risks that “could have a major impact on society and industry.” The damage that heat, heat-loving fungi, and plastics can do to our bodies and our environment could take a growing financial and legal toll, the report warns.
“With a clear trend to longer, hotter heatwaves, it is important we shine a light on the true cost to human life, our economy, infrastructure, agriculture and healthcare system,” Jérôme Haegeli, Swiss Re’s group chief economist, said in a press release accompanying the report last week.
“It is important we shine a light on the true cost to human life, our economy, infrastructure, agriculture and healthcare system”
Rising temperatures are a hallmark of human-caused climate change. 2024 beat 2023 as the hottest year on the books yet — a record that’s already expected to be broken again soon. Wildfires become a bigger danger during heatwaves as vegetation dries out into tinder. Heatwaves also put pressure on power grids, raising the risk of energy shortages and outages as people run their air conditioners. Both of those issues drive up property claims, the report says. Heat-related illness can also raise medical, life, and workers’ compensation claims.
Summer blackouts have become more common since the 2000s in the US, for example. Heat happens to be the leading weather-related killer, causing more deaths than hurricanes, tornadoes, and other disasters. Wildfires are growing more monstrous in the west; leading to skyrocketing home insurance rates and some insurers pulling out of California altogether.
Some fungi, on the other hand, are flourishing in warmer temperatures, the report highlights. It forecasts higher claims for toxic mold in buildings in hot, damp environments. Crops are also at risk from mold spreading in a warmer climate, an issue made worse by overreliance on fungicides that can increase the odds of drug-resistant fungal pathogens.
On top of all that, “plastics have become a major environmental and health concern,” the report adds. Some conservationists describe the steady stream of plastic waste making its way into the ocean as an insidious kind of oil spill. Researchers are still trying to understand what impact microplastics have once they make it into the human body. The tiny plastic particles are turning up in our food and even babies’ poop, and Swiss Re writes that “the scale of exposures may currently be underestimated, in our view.”
Plastic pollution is potentially putting companies at risk of a “new wave of litigation,” the report warns. California sued ExxonMobil over plastic pollution last year, following a slew of other lawsuits states have filed against fossil fuel companies for their role in the climate crisis. If new research winds up linking microplastics to specific health conditions, that could lead to new liability lawsuits, Swiss Re writes.
The report includes more topics of concern, from deepfake fraud to ultra-processed foods and the use of AI in healthcare. The goal of the annual report is to help businesses prepare and respond to these kinds of risks. But there’s no tackling climate change and plastic pollution without addressing the underlying cause — fossil fuels.
