Florida has come a long way in a relatively short time to understand that the climate is changing and that businesses and residents alike need a plan. The link between the climate crisis and insurance rates has prompted insurers to evaluate the amount of risk they are willing to take as weather disasters become increasingly intense. Insurance rates for property and business owners in the sunshine state are rising rapidly in some locations.
Chambers for Innovation and Clean Energy (CICE) partnered with Florida Association of Chamber Professionals (FACP) and the Greater Fort Lauderdale Chamber of Commerce to discuss how chambers, businesses, insurers, and local governments can work together to build climate resiliency and stabilize insurance costs. Speakers included:
- Dan Lindblade, CEO, Greater Fort Lauderdale Chamber of Commerce
- Anita Byers, President, Setnor Byer Insurance
- Chris Sharek, Senior Project Manager, Jacobs and Board of Directors, Manatee Chamber of Commerce
- Alex Reed, Director, Office of Resilience and Coastal Protection Florida Department of Environmental Protection
Data confirming the climate crisis is undeniable and “It’s shocking that we go on with business as usual,” says Dan Lindblade. He encouraged chambers to discuss climate resilience within their board of directors and work to educate members on the issue. Climate risk includes droughts, fires, excessive heat, storm surge, flooding and sea level rise. The groups insuring against these events include insurance companies, financial institutions, and the government. The cost of climate risk (internationally) is 2% gross of domestic product (GDP), but it is expected to rise to 4% by 2050 due to climate induced costs. While most insurance companies recognize the magnitude of climate risk, fewer than half have taken real steps to resolve the risks, but insurance companies are changing their perspective. Insurance companies are no longer worried about scaring away banks by talking about climate impacts. Historical models, which have been used to project climate risk, are no longer viable due to the increased pace of climate change.
In Florida insurance companies are getting more selective on what properties they will insure. This change could result in a 100-150% increase on older properties, especially if the roof is older, and a 10-15% increase for newer properties/roofs. Climate risk is also impacting other types of risk, including general liability and directors and officer claims.
“The business community must be proactive. For so long, risk was simply transferred to the insurance company and property owners washed their hands of the risk. Property owners need to start now to make sure their risk is the type of risk that they are willing to fund themselves, because if they aren’t willing to fund it themselves, they may not find anyone else to fund it,” says Anita Byers.
With extreme weather becoming more dangerous and destructive, it’s important to be proactive and look for solutions before the next storm or flood hits. Chris Sharek with Jacobs said we need to be “solution focused” when talking about climate resilience. Jacobs, an engineering firm, has been working on climate resiliency projects throughout the state, aiding businesses of all kinds to be proactive. One project in particular, executed for Tyndall Air Force Base, included a 4 billion dollar rebuild of the base to create a new design standard as a result of the damages endured by Hurricane Michael. This is a prime example of the private sector throwing their hat in the ring and making efforts towards climate resiliency alongside government entities.
State and local governments play a vital role in climate discussions. Senate Bill 1954, signed by Gov. DeSantis in May 2021, otherwise referred to as the climate resilience legislation has four key components.
- Affirms that Florida has a problem with sea level rise and flooding.
- Introduces a grant program to help communities adapt.
- Affirms this is a state issue, not just a coastal issue.
- Outlines the need for a statewide vulnerability assessment with prioritized funding going to the most critical assets.
This legislation has been a great first step for advancing climate resiliency throughout the state.
Alex Reed with the Office of Resilience and Coastal Protection of the Florida Department of Environmental Protection, the state department tasked with implementing SB 1954, said businesses can be a big help by reaching out to their local government in support of climate legislation. “This needs to be a community effort,” says Reed. Not every community has the same assets or needs, but the business community can help identify regionally significant assets that may support adjacent communities.
Businesses of all sizes will continue to be affected by the climate crisis, especially in a high risk state such as Florida. Taking action as a chamber is beneficial for members, and the community in which everyone serves. Chambers have the opportunity to lead by example and work alongside government entities and businesses to ensure a better future for all. Claim your seat at the table and be prepared for a bumpy ride.
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Watch the full video here.
