Climate Change Expert Says Insurers Are Pioneering Solutions

PHILADELPHIA, Jun 18, 2008 (A. M. Best via COMTEX) -- AIG | Quote | Chart | News | PowerRating -- Most companies want to participate in ?green? problem-solving, and insurance companies ? American International Group, Marsh and others ? have been among the most active in pioneering solutions when working in partnership with the Environmental Defense Fund, according to EDF President Fred Krupp.

Krupp told a packed auditorium at a half-day conference June 17 in Philadelphia that his outlook on climate-change issues is ?one of optimism, instead of dire straits.?

Two insurance executives, also invited to take part in the panel discussion at the conference organized by the Cozen O?Connor law firm and Oklahoma City University School of Law, said insurers are rolling out new products and services to tackle climate change.

Wolfgang Friedel, executive vice president for global property and specialty lines at Ace USA, termed climate change ?a serious challenge? to the industry and reminded the audience that in a globalized economy, a weather-related event overseas sometimes has consequences for the American economy.

The industry is responding, he said, with new products that encourage responsible uses of energy. For example, Ace now markets a property/casualty policy, Green Building Wrap-Up, which covers the additional expense of ?green? upgrades for commercial structures. Friedel added that the insurance industry stands ready to bring risky but promising alternative energy solutions to market.

Rick Hawkinberry, senior vice president for Willis? environmental practice, echoed Friedel by saying that, in 2006, insurers had 192 ?green? products and services to offer; last year, that number swelled to 422.

Several new technologies are on Willis? radar, Hawkinberry said, including a carbon capture and storage system that?s now in pilot test phase. And he praised the industry?s leadership on environmental issues. Most insurers now have in-house ?green? task forces; some participate in diversified efforts such as Climate Wise; and even the National Association of Insurance Commissioners has a climate-change task force to develop model rules for insurers to meet the coming ?green? revolution, he said.

Speaking to more than 150 insurance and corporate executives, attorneys, researchers and environmentalists, Krupp predicted that regardless of the outcome of this November?s presidential election, he is ?confident we can overcome the problem of global warming.?

He said both candidates, Republican John McCain and Democrat Barack Obama, intend to prod Congress to draft comprehensive climate-change legislation within their first 100 days in office. Legislation, Krupp said, will be hotly debated but once it becomes law, ?it will unleash a wave of innovation? that promises to ?cure the patient [Earth].?

?Help is on the way,? he said.

A New York Times best-selling author, Krupp recently released his latest book ?Earth: The Sequel.? In it, he explores how American entrepreneurs and corporations are already tackling climate change, with surprising results. By working with market forces for change instead of using confrontation and courtrooms, he noted that his organization has forged strategic partnerships with Fortune 500 firms such as FedEx, McDonald?s and DuPont to address climate issues.

Krupp pointed to the 1990 Clean Air Act and its successful cap-and-trade provisions that helped reduce acid rain by half, as a prototype for solving the much more complex issue of carbon dioxide and other greenhouse gas emissions.

(Dennis Gorski, Best's Review managing editor)

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