Risky Business

With $58 billion in claims to pay for last year alone, U.S. insurers are jacking rates, canceling policies, and learning to cope with climate change.

...In 18 states, from southern Texas to the northern tip of Maine, insurance companies are scrambling to reduce the risk of major hurricane-related payouts. The upshot: For the 43% of the U.S. population who live and do business in these states, rates are likely to rise between 20% and 100% over the next year, according to the Insurance Information Institute. (In the rest of the country, premiums are expected to rise about 4%.)

The insurance industry does not officially believe in global warming, but they do accept that the climate is changing.

A changing climate shakes the industry

Says Allstate CEO Edward Liddy: "We are in a period of increased land and sea surface temperatures. When you couple that with more people living along coasts and dramatically increased home values in those areas, that's when you step back and you say, 'Wait a minute. This is not yesterday's game.' "

Publicly, insurers have not accepted the theory of global warming, which says that the accumulation of greenhouse gases - in part because of activities like burning fossil fuels - is changing weather patterns. What the industry does believe is that, for whatever reason, weather isn't what it used to be.