Insurance Firms Ask If Global Warming Swells Disaster Rate

THE thesis of accelerated global warming is making insurance firms edgy.

Some scientists are linking rising temperatures to an increase in severe weather events in recent years, and, if the trend continues, it may push some insurance companies into bankruptcy, say insurance executives.

''Mother Nature has gotten our attention in a way never before experienced,'' Frank Nutter, president of the Reinsurance Association of America, told a Berlin Climate Conference attended by delegates from 150 countries.

''Our biggest concern is unpredictability,'' Mr. Nutter says. Historical trends are proving increasingly irrelevant in calculating risk, he adds. That lack of predictability is prompting insurers to hike both premiums and deductibles in an effort to cover increased risk.

Twenty-one out of the 25 largest catastrophes in the United States, in insured terms, have occurred in the last decade, according to Nutter. Of those, 16 involved both wind and water, mainly in the form of hurricanes. The biggest disaster of all, Hurricane Andrew in 1992, cost insurers about $17 billion.

''The worry now is a mega-catastrophe,'' Nutter says. ''Andrew was a wake-up call.''

Global warming threatens to melt polar ice, causing water levels worldwide to rise, some scientists warn. It could also change weather patterns, increasing the severity of storms, or cause drought in previously fertile regions.

''It is the threat to people from natural events that drives much of the demand for insurance; yet it is the same threat of future natural catastrophes that could jeopardize the industry's financial viability,'' Nutter says. ''It is imperative for our industry to engage in the broadest understanding of the risk associated with forces of nature.''

Insurance company representatives, including such global players as Lloyd's of London, are keenly observing the conference.

SCIENTIFIC data shows average temperatures have risen about one degree Fahrenheit over the last 150 years. And the temperature rise is expected to accelerate in the coming century, according to United Nations-sponsored research.

Many environmentalists say the cause of global warming is the increase of man-made, ''greenhouse gases,'' including carbon dioxide (CO2), in the atmosphere. Science, however, hasn't been able to precisely pinpoint the causes, rates, or magnitude of the warming trend. It could be part of a naturally occurring climatological cycle.

Environmental groups, such as Greenpeace, are anxious to enlist the support of the insurance industry to reduce global CO2 emissions. But industry representatives are taking a cautious approach.

''There is a big question mark on [CO2] emissions,'' said Andrew Dlugolecki, the chief manager of General Accident of Britain, and a member on the United Nations Intergovernmental Panel on Climate Change. ''We [the insurance industry] are watching with extreme caution, but we're not yet in a position to start lobbying strongly for [CO2] emissions control.''