Warren Buffett says ‘global warming’ is not impacting insurance industry
Berkshire Hathaway CEO Warren Buffett on Monday said he has not yet seen sufficient evidence that climate change is affecting weather events to a degree that would make him change the way his conglomerate’s insurance businesses write policies.
Events such as Hurricane Sandy have raised concerns that global warming is increasing the intensity and frequency of so-called superstorms.
“I have not seen anything yet that would cause me to change the way we look at evaluating quakes, tornadoes, hurricanes by atmosphere. Now, that may happen some day,” he told CNBC’s “Squawk Box.”
He added that the frequency of Florida hurricanes has been “quite low” for roughly the last decade compared to historical trends, and storms in the Sunshine State, Texas and the U.S. Southeast have been “remarkably benign.”
Buffett delivered a similar assessment in last year’s annual letter to shareholders. In that letter, he said climate change had not up until then “produced more frequent nor more costly hurricanes nor other weather-related events covered by insurance.”
That caused rates for super-catastrophe insurance to fall, leading Berkshire to back away from the products, according to Buffett. Costlier and more frequent “super-cats” would actually likely benefit Berkshire’s insurance business, he wrote.
At the time the letter was released, Buffett was facing a proposal from a shareholder that asked Berkshire to report on the dangers climate change poses to the company’s insurance operations.
Research shows it is premature to conclude greenhouse gas emissions from human activities “have already had a detectable impact on Atlantic hurricane or global tropical cyclone activity,” according to the National Oceanic and Atmospheric Administration.
NOAA added human-caused global warming is likely to make tropical cyclones around the world more intense by the end of the century, increasing the destructive potential of storms. NOAA also says research shows “better than even odds” that warming will increase the frequency in some — but not all — parts of the world.