Insurers in NY, CA, WA Forced to Disclose Climate Change Risks

Regulators in the states of New York, California and Washington will mandate that insurance companies report on the risks facing both business and customers regarding severe weather and other consequences of global climate change. Reporting will focus on severe storms, wildfires and rising sea levels, in particular.

"You get a far better response rate if you require response to be provided than if you just allow companies to decide when and how they will respond," California commissioner Dave Jones told The New York Times. "Our goal is to have the most complete, best and accurate information possible for investors, the insurance industry, regulators and the broader public."

Insurers are being asked to share their views of climate change risk to ensure that both industry and public officials are prepared.

Recent research shows few insurers have concrete plans in place for addressing climate change. Sustainable Business reports that only 11 of 88 companies surveyed last year have formal policies for handling environmental catastrophes, supply chain disruptions and other concerns.

One of the key challenges will be in encouraging insurers, who traditionally rely on historical trends to make risk assessment, to look forward instead.