AIG is First Insurer to Tackle Climate Change Written By: Thomas Chenoweth 2007-02-13 12:25:41 Insurance customers see rising rates and dropped policies. Insurance companies, according to Ceres , experience insured losses multiplying 15-fold in three decades: far faster than inflation, population or growth.
Climate change affects nearly every industry in at least three ways: directly (i.e. drought, sea level rise), through increased regulations, and through market perception that climate change is a problem. The difference is that the insurance industry needs to address climate change much more quickly. On one hand, the market for climate-change related products is growing. On the other claims from damage from 500-year floods every few years, a multi-year drought, or another Katrina would be daunting.
Berkshire Hathaway on Global Warming Written By: David Neubert 2007-05-05 11:39:58 In responding to a shareholder question on climate change, Buffett says global warming won't affect results at General Re. But both Warren Buffett and Charlie Munger offer interesting perspectives that do not agree.
Buying an Insurer: I'm Afraid Of Global Warming, Chubb Isn't Written By: David Neubert 2006-12-15 18:20:11 I had to add to my Chubb (CB) position. This property and casualty company is so cheap at a p/e of 8. They've had this low p/e for years as the stock has climbed. People are worried that global warming and terrorism mean that there is another unexpected disaster out there that will hurt insurance companies.
Chubb - Time To Buy Written By: David Neubert 2007-09-19 11:20:36 Chubb (CB - $52.95) has been dead money for the last two years. I think it's the best managed of the insurers. But I usually wait for some kind of disaster to push the market down before I buy a property and casualty insurer. People hate this sector right now because property and casualty rates have been falling after the big runup after Katrina. Now we've gone a couple years without a huge disaster and prices are really coming down.
Many who watch the sector are worried that prices do not reflect the risk. They are right but the discount being applied to Chubb is just too much. It has a trailing p/e of only 8.7 right now. So I'm going to add a bit to my position in the next few days, maybe right after I write this. What is my risk? a big hurricane or earthquake. That's true and I really hope that doesn't happen because it means people suffer - and some payouts for Chubb. But a disaster like that and claims for Chubb would also mean a return to higher insurance rates which would also be good for Chubb.
Disclosure: I own Chubb (CB). Chubb is my property insurer for my New York Condo. I think I pay too much but since they have a reputation for paying claims quickly and without fighting much I'll stick with them.
In his list of examples, he includes that Obama's (and Buffett's) support of the inheritance tax is good for for Buffett since he plans to give away most of his money to charities.
