Actuarial Approaches
to Global Warming
Written by Dr. Paul Epstein to
The Boston Globe, August 7, 2006

Dear Editor:
Beth Daley (Aug 6, page 1) does an excellent job examining the insurance industry’s evolving approach to increasingly severe weather. The underestimation of storm intensity may be due to the finding that, over the past half century, the oceans have absorbed twenty-two times the amount of heat as has the atmosphere. Deep ocean warming drives sequences of storms, melts ice and is changing North Atlantic circulation.

The insurance industry can do more than raise premiums and make exclusions. Insurers and other large investors can shift their assets into clean energy technologies and advocate for public policies to enable the transition to occur safely and profitably.

Distributed means of generating energy cleanly and much greater energy efficiency will decrease vulnerability to storms and heat waves, improve public health and development in poor nations, and create markets for technologies that help stabilize the climate.
Sincerely yours,

—Paul R. Epstein, M.D., M.P.H.
—Associate Director
—Center for Health and the Global
—Environment,
—Harvard Medical School
—Cambridge, MA

EDITOR’S NOTE
Beth Daley’s article, “Homeowners may feel heat of global warming,” to which Dr. Epstein was responding, reported that a major insurance industry research organization, “Risk Management Solutions released the new model in May, predicting that average annual insurance losses will increase 25 to 30 percent in the coastal Northeast because of increased hurricane activity.… The confidential risk models that private companies like AIR and Risk Management Solutions develop are key factors in the price of homeowners insurance bought by many coastal residents. The modelers calculate the risk from hurricanes, earthquakes, and other natural hazards to homes and businesses in a region that takes into account everything from construction material to wind speeds. Insurance providers often use the predictions as an important piece in a complicated formula to set rates.”

Hostile Takeover
Written by Jerry Engelbach, to
The Washington Post • Feb. 4, 2005

Your editorial about the Democrats’ failure to provide an alternative to Bush's plan to privatize Social Security buys into the erroneous idea that Social Security is in imminent financial danger. The Bush plan has nothing to do with “saving” Social Security. Rather, it is equivalent to a hostile takeover in the corporate world: transfer Social Security money to the stockbrokers in order to increase profits on Wall Street. By creating an atmosphere of crisis, Bush hopes arouse panic and a need to rush his plan into effect.

In fact what we need are not equally hasty, crisis-driven opinions like that of your editorial —which automatically assumes that benefits must go down, and in effect tells Democratic politicians to “hurry up and come up with something better”—but a calm realization that there is ample time to carefully consider, and work out thoroughly, plans that (1) do not involve penalizing the benefits of workers and (2) are not devised by politicians and their financial advisors but originate with the workers themselves.

—Jerry Engelbach