Factoring in global warming

The catastrophic aftermath of Katrina and the above average hurricane activity in both 2004 and 2005 have fueled a scientific debate over the effects of global warming. Last week, Wendy Baker , President of Lloyd’s America, addressing a meeting of WorldBoston (the influential non-profit organization which sees itself as a forum for educating the US public about matters of national and international significance) warned that the insurance industry must wake up to the threat of global warming and the growing cost of weather-related catastrophes on the world economy. She also urged US insurance regulators to do their part, by scrapping antiquated and ill-conceived protectionist rules that handicap Lloyd’s and other insurers outside the US. Lloyd’s, despite its credit rating, has more than $10bn tied up in collateral accounts.