Excerpt from Boiling Point by Ross Gelbspan, plus links to reviews, author biography & more

By contrast, most U.S. insurers have been economically defensive and politically invisible. Insurers in this country have withdrawn coverage further and further inland from coastlines. They are refusing to insure known storm corridors and selling the risk off to the public. They are keeping silent politically.

The concern of the European insurers is reflected in their estimates of coming economic losses. The United Nations Environmental Programme (UNEP) has projected that climate damages will amount to $150 billion a year within this decade. The world's largest insurer-Munich Reinsurance-has said that within several decades, those losses will amount to $300 billion a year. And two years ago, Britain's biggest insurer projected that, unchecked, climate change could bankrupt the global economy by 2065--from property damage due to sea level rise and increasingly severe storms and floods; destruction of energy, health, and communications infrastructures; crop failures; losses in the travel and tourism industries; and public health costs.

In the spring of 2003, Swiss Reinsurance, one of the world's largest reinsurance companies, took a major step beyond corporate rhetoric into corporate operating policy. The company began to ask its directors and officers insurance clients what they were doing to prepare for government restrictions on their emissions of greenhouse gases. According to the Wall Street Journal, 'Swiss Re is considering denying coverage, starting with directors-and-officers liability policies, to companies it decides aren't doing enough to reduce their output of [greenhouse] gases.'

Directors-and-officers liability coverage protects named officers and directors from personal liability arising from corporate mismanagement--the kind of suits that have swirled in the wake of recent scandals involving companies like Enron, WorldCom, and Tyco. In this case, the liability would arise not from corporate fraud but from failure to deal with the coming consequences of climate change.

'Emissions reductions are going to be required. It's pretty clear,' said Christopher Walker, a managing director of Swiss Re. 'So companies that are not looking to develop a strategy for that are potentially exposing themselves and their shareholders.'

The world's largest reinsurer, Munich Reinsurance, is proceeding down the same road as Swiss Re. One executive of Munich Re noted that that company, too, may begin to deny coverage to firms that are not preparing to reduce their greenhouse gas emissions.

One of Swiss Re's clients, Baxter International, Inc., a major producer of health-care equipment, decided six years ago to begin publicly reporting their greenhouse gas emissions. 'Global warming will be increasingly detrimental to the well-being of millions,' the company says on its Web site. 'All large companies must step forward and . . . address this critically important issue.'

A Baxter vice president, responding to the new Swiss Re coverage policy, said: 'When the insurance companies are debating things, they're debating them because they're beginning to see there may be practical consequences. And when that happens, you've got to pay attention.'

Following up on its demands that its clients attend to their greenhouse gas footprints, Swiss Re is also promoting the use of emissions trading as a means to facilitating the reduction of carbon emissions. As a leading proponent of greenhouse gas cuts in the insurance industry, Swiss Re has become a member of the International Emissions Trading Association, the Chicago Climate Exchange, the International Centre for Carbon Sequestration (ICCS), and the Emission Market Development Group (EMDG).

Swiss Re took a further step toward mobilizing the finance world around the climate crisis in late 2003 when it sponsored, along with the United Nations Environment Programme, a conference of officials controlling some of the nation's largest pension funds.

From Boiling Point by Ross Gelbspan, pages 93-126 of the hardcover edition.  Reprinted with Permission from Basic Books – Copyright 2004.