Climate Change Impacting Insurers In Connecticut

Insurance companies that write business in Connecticut are being asked to provide details regarding climate change risks and how it could potentially impact their investments, environmental strategy and communications with customers regarding the affect on policies.

Thomas B. Leonardi, the State Insurance Commissioner,  has distributed a comprehensive survey to about 100 insurers that will eventually be made available to the public. Among some of the major topics of the survey are the changing weather patterns and how companies research and plan for these unexpected events and what financial impact it could have on customers.

And certainly, the stability of rates is a major concern for Mr. Leonardi. If prices of policies are going to wildly fluctuate after every change in weather patterns or large-scale events, rate stability will vanish, which is one of the goals of any State Department Of Insurance. Some of the biggest concerns are the potential damage caused by hurricanes, severe thunderstorms, extended heat waves, tornadoes and major hail storms.

Tornado Connecticut

Tornadoes Are Covered By Home Insurance


The survey was sent to carriers that not only wrote auto and homeowner’s insurance, but also life and health benefits as well. Although the focus is more on property and casualty coverage when natural disasters are discussed, life, health and disability rates could also be adversely affected.

Of course, not every insurance company is going to agree on how much time, effort and money should be spent on the subject. In fairness, the notion of climate change and global warning is still very subjective. Hartford, for example, is one of the largest companies doing business in Connecticut and they have devoted time in the past taking similar surveys and closely studying the results.

Aetna  has also been active in conserving energy in locations here in the US and abroad. they have been very active in promoting the protection of resources and consuming less energy, which translates to lower premiums for customers. Their best health insurance rates in Connecticut are also among the most competitive, although, in fairness, conservation probably does not substantially impact their healthcare prices

National disasters continue to cost big and small insurance companies tremendous amounts of time, manpower and money. In 2012, almost $60 billion was spent on paying  and investigating claims, cleanup and rebuilding.  Storm Sandy was responsible for almost $26 billion of that amount, and claim payments are still being paid. Fortunately, sufficient reserves were available to pay all claims.

Larger insurers are typically better at weathering the storm (no pun intended). The five largest carriers in Connecticut  (ranked by their total assets) are Hartford, Aetna, Tavelers, General Re and Phoenix Home Life Mutual. Although their views on the possibility (or existence) of climate change may be different, all five companies are quite financially sound.

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