Hurricane Sandy cost the U.S. some $70 billion in direct damages and lost economic output. This is, obviously, a lot of money — Sandy was the second most expensive hurricane in U.S. history after a small tropical storm called Katrina. Much of that cost was borne by the government — local, state and federal — and some of it was absorbed by those of us who lived in the storm’s path. But about $20 billion to $25 billion of the damage from the storm was eventually covered by the insurance industry. Much of that bill in turn was covered by the big reinsurers, the companies that take on insurance policies from primary insurance companies looking to spread out their risk. And if you were an insurance company affected by Sandy, you better hope you had a reinsurer behind you.
One of the biggest of the reinsurers is Swiss Re, and yesterday I had a chance to talk with the CEO of Swiss Re Americas, J. Eric Smith. Smith was in New York City to speak at an event for the Climate Group, an international nonprofit that works with companies, cities and states on sustainability. The event was held at the NASDAQ headquarters in Times Square, where the temperature threatened to push past 100°F. Global warming was on everyone’s mind, even though the air-conditioning inside was on full and shades blocked out the droning city sun. “What keeps us up at night is climate change,” Smith said. “We see the long-term effect of climate change on society, and it really frightens us.”
By Bryan Walsh
Read full article at Time: Science and Space