As climate heats up, Allianz premiums get fired-up

European insurer Allianz AG is set to increase future insurance premiums in direct response to the risk posed by global warming, which increases claims resulting from increased flood frequency and heat waves. In order to reduce greenhouse gas emissions caused by the burning of coal and natural gas, Allianz states in the next five years it will spend up to US$600 million on renewable energy investments a twofold increase of its prior investments. Placing the onus on government, the Company requested that the federal level implement specific energy and transport policies beyond 2012. Allianz hopes that this move will force control on the production of greenhouse gassesIn its report, Allianz recommends that funds managers and banks allocate more expenditures toward the evaluation of how economies, industries, markets and asset values may be affected by climate change.Starting this year, power plants and factories in the 25 EU countries must have an allowance for each ton of carbon they emit. Companies that emit more need to buy allowances in the market; those that emit less can sell their surplus.