Insurance companies will be ahead of the curve on global warming. Another sign is that Lloyd’s of London is educating its own customer base about the changing risk profile of various investments. Lord Levene, chairman of Lloyd’s, says: “We had a conference last summer on the whole question of climate change, to try and bring it through. It’s no good just telling ourselves about it at Lloyds, we have to tell the whole of our insured customer base, which is worldwide.”

Why is this important? Insurance companies are asked to pay when damage occurs due to weather events. That’s the point of insurance. But, when a changing climate changes how weather patterns interact with business — well, insurers have to raise rates. Sometimes they raise them a lot. And sometimes, they simply leave the market altogether.

Here’s a possible future scenario: Insurance gets so expensive in certain parts of the America (say, coastal areas like Miami or New Orleans) that insurance companies either leave, end up bankrupt, or end up litigating themselves to death. Government is asked to take up the slack. And then… successive massive losses occur, with government expected to pay. The companies that leave thrive, and the public goes further into debt.

We’re possibly seeing only the earliest struggles over these kinds of topics now, as Allstate and State Farm struggle with Louisiana officials over homeowner insurance. As a recent Washington Post article discusses, Florida continues to build and invest in plenty of places which don’t make sense any more in light of climate and hurricane risk, and the State of Florida will be holding the bag if another big storm … um, when another big storm hits.

From where I write, near the Ohio River, there’s a consistent joke: “Hey, in the future, this is beachfront property.” Morbid joke, perhaps. But when insurance companies begin to take that idea seriously, you start totaling how many trillions of dollars of assets would be underwater if this were on the beach.