Climate Change Perspectives …

Today: Warren Buffett

First, let’s put a couple of stakes in the ground …

I’m not a big Warren Buffet fan.

He’s a big fan of Barack Obama, and is always being rolled out as the sage of American business.

He whines about how his secretary’s marginal tax rate is higher than his … but, he doesn’t consider paying her more to cover the difference …  he just asserts that my taxes should be higher.

But, since he’s President Obama’s man, I wondered …

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Where does Buffett come out on climate change?

 

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That should be right down Buffett’s power alley.

You see, Buffett’s Berkshire Hathaway owns several insurance and reinsurance interests—including Geico and General Reinsurance – companies that have to pay significant claims when natural disasters strike.

Because managing risk is their business, insurance companies are the gold standard for calibrating risk and pricing their products.

So, how have his savvy profit-maximizers been pricing the effect of climate change into their products?

In a CNBC interview, he said: “The effects of climate change, “if any,” have not affected the insurance market.”

“It has no effect … [on] the prices we’re charging this year versus five years ago. And I don’t think it’ll have an effect on what we’re charging three years or five years from now.”

Note the “if any” qualifier in his answer.

He goes on to say: “The U.S. has been “remarkably free of hurricanes” in the past five years with only slightly more tornadoes.”

“The public has the impression that because there’s been so much talk about climate that events of the last 10 years from an insured standpoint and climate have been unusual, but they haven’t been.”

Oh my, is Warren Buffett a climate change denier?

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Click to view Buffett’s interview on CNBC … it’s worth watching.

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One Response to “Climate Change Perspectives …”

  1. Dan Says:

    Great post – insurance companies, especially the reinsurance guys, who bear the excess risk, put their money where they mouth is, and in this case, the message is clear, there is no elevated risk due to “climate change”. It’s even sweeter that Buffet communicates the message!

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