Helen Yates asks Ernst Rauch, a Munich Re windstorm and climate expert, why climate change is still such a controversial topic.

Q. There were some heated debates at the Climate Change 2007, particularly among the scientists present. Why, in your opinion, is this issue still so controversial?

A. There is actually huge consensus amongst climatologists on the science and drivers of climate change. In the 2007 IPCC summary report, some 2,500 scientists from all over the world express this consensus in a very clear language. In that regard, the controversial views expressed basically by one single person during the Climate Change 2007 event was not representative for the current scientific understanding of this issue.

Q. Why is it so important for the insurance industry to be involved in the climate change debate? How should the industry be involved?

A. The insurance industry is directly affected when the frequency and severity of extreme weather events increases. We have been actively involved in raising awareness for climate change among all stakeholders and in finding solutions aimed at slowing down anthropogenic climate change and mitigating its consequences.

Q. Munich Re recently signed a declaration issued by the Global Roundtable on Climate Change. What did this signify?

A. Munich Re has been a member of the GRoCC since its inception in 2005. In signing the declaration by our reinsurance CEO, Dr Torsten Jeworrek, we wanted to show our stakeholders our ongoing commitment to supporting measures to reduce negative impacts from climate change to our business as well as to society as a whole.

Q. How likely is it that the very active hurricane seasons in the Atlantic in 2004 and 2005 were in part driven by man-made climate change?

A. Scientifically it is not possible to link one or two hurricane seasons to climate change. However, the hurricane frequency and the intensities of tropical cyclones in the North Atlantic have changed significantly over the last decades. In part this is caused by a natural fluctuation. But also the long-term warming of the Atlantic, driven by increasing atmosphere temperatures, has contributed to above-average hurricane activity in recent years.

Q. If there were an opportunity for catastrophe modellers to use predictive simulations, could that help (re)insurers prepare better for the consequences of climate change?

A. Although such “forward looking” scenarios would have a certain degree of uncertainty, risk managers would be able to gain a better understanding of potential impacts on probable maximum losses in a, say, 2°C warmer climate, which could become reality within the next ten to 20 years.

Q. What, in your opinion, are some of the likely consequences of climate change in the next few decades if carbon emissions continue at their current rate?

A. The key message is: the longer we wait to reduce greenhouse gas emissions, the larger the impact will be on various meteorological patterns and hence also on loss developments.

Q. If climate change does lead to more frequent and more intense natural catastrophes, is there an argument for greater government involvement?

A. If the number and size of losses increase, somebody has to pay the price. Societies will have to decide to what degree they want the individuals who live in catastrophe-prone areas to assume responsibility for managing their own risks or to what degree society as a whole, ie taxpayers all over the country, should share the risk. We feel that for society as a whole private insurance is a better solution than making the risk society’s responsibility via subsidised taxpayer pools.