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Oct 2021

US: Agriculture insurance claims surge due to climate change

Source: Middle East Insurance Review | Sep 2021

Global warming has contributed substantially to rising crop insurance losses in the US according to a new research study by a team of climate scientists from Stanford University.
 
The new research ‘Historical warming has increased US crop insurance losses’ published in a recent issue of Environmental Research Letters studied the impact of global warning on the US crop insurance programme. This programme was established by the US Congress in the 1930s to revive domestic agriculture.
 
The new research has revealed that climate-fuelled temperature increases generated an estimated $27bn in insurance payments to farmers between 1991 and 2017 and these losses accounted for 20% of the programme’s total payouts over that period.
 
Stanford University professor of earth system science and an author of the research Noah Diffenbaugh said his team was able to attribute $27bn in insurance claims and payments to climate-related trends by comparing “actual indemnities and the counterfactual indemnities aggregated across all the years and all the counties for the whole of the US”.
 
In 2012, when much of the US experienced an intense drought and record summer temperatures — crop indemnities surpassed $18bn, making it the costliest year for the insurance programme. The study estimated that climate-related temperature trends were responsible for $8.8bn of those payments.
 
Professor Diffenbaugh said we can expect the kinds of conditions that happened in 2012 to happen a lot more frequently in the current climate — and even if the Paris Agreement goals are achieved and global warming is held below two degrees of warming.
 
He said, “It is clear at this point that we are not adapted to the climate change that’s already happened and as this study shows and as other studies have shown, it is costing us substantially.” M 
 
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