Table of Contents

Executive Summary 5
Introduction to Global Warming 6
Overview 6
Causes of Global Warming 7
Greenhouse Gases in the Atmosphere 7
Positive Feedback 9
Solar Variation 10
Examining Temperature Changes 12
Recent 12
Pre-Human Climate Variations 13
Global Climate Model13
Effects of Global Warming 14
Effect on Weather 16
Increased Evaporation18
Economics of Weather Change 19
Climate Destabilization 20
Effect on Oceans 21
Rise in Sea Levels 21
Increase in Temperature 22
Disruption of Thermohaline Circulation 22
Effect on Ecosystems 22
Effect on Glacier Retreat 24
Effect on Agriculture 27
Economics of Global Warming 27
What is a Low Carbon Economy? 28
Adapting to Global Warming 30
Mitigating Global Warming 30
Environmental Issues Stemming from Global Warming 32
Ozone Depletion 32
Ocean Acidification 32
Global Dimming 34
Background of Insurance Industry and Global Warming 36
Introduction to Global Warming Insurance 37
Overview 37
Insured Losses from Severe Weather 37
Impacts of Global Warming on the Insurance Industry 39
Role of the Insurance Industry 39
Learn about Climate Change 39
Lead by Example 40
Mobilize Disaster Preparedness Technology and Planning 40
Support Climate Monitoring and Research 40
Capitalize on Energy Efficiency and Renewable Energy 41
Consider Green Investments 41
How to Adapt the Insurance Industry to Climate Change 41
Looking at Industry-Wide Action against Global Warming 42
Insurance Coverage Issues 44
Overview 44
‘Trigger of Coverage’ 44
Regulations on Losses 44
Exclusions Related to Pollution 45

Other Issues 45

Case Studies 46

National Flood Insurance Program 46
Overview 46
How the Program Works 47
Assessing the Risk 48
Funding 49

Federal Crop Insurance Program 50
Overview 50
How the Program Works 51
Assessing the Risk 52
Funding 53

A Look at the 2006 Munich Re Workshop on Climate Change & the Insurance
Industry 54

Appendix 57
Glossary 68

List of Figures

Figure 1: Carbon Dioxide Variations 8
Figure 2: Solar Cycle Variations 11
Figure 3: Risks & Impacts of Global Warming 15
Figure 4: Achieved Storm Intensity under Idealized Conditions 17
Figure 5: Increasing Water Vapor at Boulder, Colorado 19
Figure 6: Recent Sea Level Rise 21
Figure 7: Mountain Glacier Changes Since 1970 25
Figure 8: Dresden Disaster, August 2002, Economic Losses of €16 billion 57
Figure 9: Heat Wave of 2003, the Largest Humanitarian Natural Catastrophe in Europe for
Centuries 58
Figure 10: Hurricane Catarina off the Coast of Brazil, March 2004 59
Figure 11: Hurricane Katrina (August 29, 2005) 60
Figure 12: Hurricane Rita (September 24, 2005) 61
Figure 13: Hurricane Stan (October 3, 2005) 62
Figure 14: Hurricane Vince (October 9, 2005) 62
Figure 16: Tropical Storm Delta (November 27, 2005) 63
Figure 17: Great Natural Disasters 1950 – 2005, Number of Events 64
Figure 18: Great Natural Disasters 1950 – 2005, Number of Geological Events 64
Figure 19: Great Weather Disasters 1950 – 2005, Number of Weather Related Events 65
Figure 20: Great Weather Disasters 1950 – 2005, Economic & Insured Losses 65
Figure 21: Tropical Cyclones in the Atlantic 66
Figure 22: Global Warming & Hurricane Landfalls in the U.S. 67