Managing the Risk
Jeff Shonka
CEO of First Insurance Co. of Hawai‘i
Climate change could make insurance unaffordable for some people and economies. That’s the warning from advocates, policymakers, and leading insurance companies around the world. “The more bad things happen as a result of extreme weather events, like flooding, hurricanes, and wildfires, insurance companies take note and adjust their rates accordingly,” says Jeff Shonka, CEO of First Insurance Co. of Hawai‘i, the largest insurer of property in the state. “If you care about how much you pay for insurance, then you should care about climate change.” According to the New York Times, officials in California, Washington, Montana, and Colorado are getting more complaints from people whose insurance companies have refused to renew their coverage. The uptick follows years of record-setting wildfires in both size and cost. Shonka wants to see Hawai‘i take a more proactive approach to manage risk. “Insurance companies should be wary about covering buildings that are close to shore, not only because of rising sea levels, but also due to king tides, storm surges, and other events that suggest that flooding and inundation are more likely than they were a decade ago,” he says. “It’s our responsibility as an insurance company and as part of the risk management industry to avoid reinforcing behaviors that may place property and people in jeopardy.”
Photos courtesy of (clock-wise from top left): TNC/Ethan Welty, Li Yang on Unsplash, Rafael Bergstrom, Philip Racsa