thing that makes us less uncomfortable
is that this is the state of knowledge in
the industry.”
Which raises a costly dilemma for
players with real money on the line.
“The question,” notes Chia-Ying Lee, a
Columbia faculty colleague of Sobel’s
who has led the team’s modeling work,
“is, with one saying ‘more’ and one say-
ing ‘less,’ which to believe?”
Back in Zurich, Bertogg, the Swiss
Re catastrophe chief, would love to
know. “I was hoping,” he says, exuding
Swiss diplomatic restraint, “for a bit
more clarity.” In light of the Columbia
team’s results, he says, the insurer plans
to tweak its models to “add more un-
certainty” about hurricane frequency.
Meanwhile, the company will keep
searching for more understanding.
Such is life for Swiss Re as it
scrambles to understand how global
warming will affect its profits—and to
understand it specifically enough to
help it redirect its business. Ultimately,
the same strategic conundrum faces all
corporations, as it does their investors
and regulators. But, as the weather vane
of the global economy, the insurance in-
dustry finds itself spinning first, trying
to calculate how the warming, shifting
winds will buffet its bottom line.
On the morning I visit Smith, Swiss
Re’s North America chief, the weather is
gorgeous. The view out the windows of
his art-filled office in Armonk, N.Y.—a
view framing grass, trees, and a reser-
voir—is sublime. But the air is thick
with thoughts of Hurricane Dorian,
which has just finished walloping the
Bahamas, 1,130 miles to the south.
By the time the storm petered out, it
generated damage that, according to
an estimate from risk-analysis firm
AIR Worldwide, cost insurers between
$1.5 billion and $3 billion.
Dorian might have walloped Swiss
Re’s coffers harder, had the storm not
dissipated as it did. “So far, this isn’t a
bad year,” Smith tells me, sitting in the
air conditioning and breathing a sigh
of relief. There are, of course, a few
months yet to go.
RACING A RISING TIDE
UNITED STATES POSTAL SERVICE
2019 Statement of Ownership, Management, and Circulation
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(1) Mailed Outside-County Paid Subscriptions Stated on PS Form 3541 (Include paid distribution above
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