Five Insurance Companies Debunk Fox On Extreme Weather
Fox News cherry-picked numbers to suggest that the cost of extreme weather events has decreased in past decades in order to attack President Obama's executive order to prepare the country for the impacts of climate change. However, the damages from extreme weather events have been on the rise since 1980 and are projected to increase in part due to climate change.
On Fox and Friends' November 4 show, contributor Stuart Varney denied the link between climate change and certain extreme weather events in the United States, denouncing Obama's executive order on climate preparedness. To assist his claim, Varney cherry-picked statistics to falsely suggest that disaster costs have decreased since the 1980s -- including an incorrect statistic on Hurricane Sandy.
Though damages from Sandy totaled approximately $65 billion, according to the National Climatic Data Center, Varney incorrectly asserted that Sandy cost $19 billion in damages (this outdated number represented predicted damages to New York City only). He contrasted his $19 billion statistic to the $160 billion in losses from extreme weather events in 2005 -- the most costly year on record in terms of extreme weather events -- and the fact that weather disasters have cost the United States over $1 trillion since 1980. After prattling off these numbers, Fox and Friends co-anchor Brian Kilmeade exclaimed, “look how they've gone down, the number of disasters and the price!”
In reality, spending on weather disasters has increased since 1980, alongside the rise of extreme weather events costing at least one billion dollars in damages:
Despite Varney's claims, five top insurance companies have recognized that disaster losses are increasing, which may be related in part to climate change:
- Munich Re, an internationally distinguished reinsurer, found that the number of weather-related loss events in North America over the last three decades has “nearly quintupled.” It noted that "[u]p to now" the increase has been “primarily driven by socio-economic factors, such as population growth, urban sprawl and increasing wealth.” However, a Munich Re study also found an increase in thunderstorm-related losses “in line with the modelled changes due to human-made climate change,” in addition to some increase from urban sprawl.
- PriceWaterhouseCoopers, which consults with many major insurance companies, states that “Twenty of the 30 most costly insured catastrophes worldwide from 1970 to 2011 have occurred since 2001. With the exception of the 9/11 terrorist attacks, they were all natural disasters.” The consulting giant further states that “A combination of a growing and rapidly urbanising population, particularly in coastal cities, and the increasing frequency of disasters due to climate instability mean that companies and governments will have to learn how to better manage the risk of expected but unpredictable disastrous events.”
- Swiss Re, a leading global reinsurer, found that large-scale weather events in 2012 led to the “third highest insured losses since 1970,” adding up to $71 billion worldwide from natural catastrophes. They assumed a model of a ten-inch rise in sea levels by 2050 -- a conservative estimate, according to Swiss Re -- to show that the “frequency of losses like Sandy are likely to increase in the future.”
- The Geneva Association, a leading international think tank of the insurance industry, found that “in some high-risk areas, ocean warming and climate change threaten the insurability of catastrophe risk.” They predict that a “new normal” of climate change may require changes in the insurance industry.
- AIG, a multinational insurance corporation, recognizes climate change as an “ongoing, significant” problem with “risks to the global economy... including risks to adequate water supply for human consumption and agricultural use.” They are sponsoring research on how to include climate change in catastrophe modeling because “no other industry responds as quickly to changes in climate patterns as the insurance industry,” and contributed to a set of principles to “guide coastal community resilience ... in light of more intense hurricanes.”
Even for those that work to downsize government spending, disaster resilience makes fiscal sense. In a statement on disaster relief reform, Taxpayers for Common Sense -- a conservative budget watchdog group-- lambasted our current “knee-jerk-reaction-oriented disaster planning.” They argued that “a more consistent federal investment in prevention would be both more fiscally prudent and preclude the need for emergency spending in all but the largest events.”
But after denying global warming in order to decry Obama's climate action plan, Fox News is now denying the facts on extreme weather recognized by insurance companies globally.
Watch the full clip here:
Shauna Theel contributed to this post.