Treasury eyes probe of climate impacts on insurance costs
The Treasury Department is looking to assess whether climate change-fueled extreme weather is raising property and casualty insurance costs.
The Treasury Department on Tuesday proposed to collect information from insurance providers about whether climate change will impact both availability and affordability of policies.
Climate change is expected to increase the frequency, the intensity or both of certain weather extremes. For example, it has been linked to both more extreme floods and higher-intensity hurricanes.
In a statement, Treasury Secretary Janet Yellen described the proposal as an important way to figure out how climate change may be increasing costs for Americans.
“The recent impacts in Florida from Hurricane Ian demonstrate the critical nature of this work and the need for an increased understanding of insurance market vulnerabilities in the United States,” she said, adding that the effort “will add to the work of regulators and policymakers across the Administration to assess climate-related risks to the financial system, the U.S. economy, and the American people.”
The announcement comes after President Biden signed an executive order last year directing studies of climate-related financial risks.
It also comes amid Securities and Exchange Commission efforts to require disclosures of climate risks on publicly traded companies.
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