Insurance companies across North America have seen their profits increase for various reasons, including an increasing focus on climate change. Ars Technica reports that climate change could cost the world economy roughly $1.2 trillion annually, and insurance firms may benefit by providing weather-related coverage. In fact, insurance currently constitutes about 7 percent of the global economy and could grow based on climate-change concerns.
Recent data shows that insurance companies have steadily increased their profits over the past several decades. The news outlet notes that insurance claims have doubled in every decade since the 1980s. Additionally, paid insurance claims now average about $50 billion per year worldwide.
Innovative technologies may help insurance firms increase their revenues. Some insurers are using science to study climate- and weather-related losses for both big and small crises, and the models may enable these businesses to expand their options.
Lloyds of London, a leading insurance brand that uses a variety of risk assessment tools, recognizes the dangers posed by climate change. Company officials said that climate change is currently the number one issue for the insurance industry and could significantly impact insurance professionals for years to come.