Insurance companies are on the front lines when it comes to exposure to the financial risks of climate change. The internet of things (IoT) is shaping up to be a key component in mitigating those risks.
“Insurance companies rely upon historical loss records to guide their underwriting and set their prices,” Washing Insurance Commission Mike Kreidler and California Insurance Commission Dave Jones wrote in the forward of Insurer Climate Risk Disclosure Survey Report & Scorecard: 2016 Findings & Recommendations by nonprofit organization Ceres. “More and more frequently, the climate is behaving in ways that we can’t predict. Weather patterns are shifting, and the severity and breadth of damage are intensifying, resulting in more costly disasters than we’ve ever seen. There is no basis in historical data for events like Hurricane Sandy, the Joplin, Missouri tornado, the Oso landslide in Washington state and record-breaking landslides in Western states. In 2016 alone, 31 major disaster declarations were reported to the Federal Emergency Management Agency (FEMA) by the end of August.”