Insurers warn of climate change threat

June 07, 2004

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The implications of climate change must be addressed now if insurers are to continue offering widely available and affordable cover, an insurance trade body warned today.

The Association of British Insurers said climate change was not an issue that would have an impact in the future, but was something that was already affecting insurance, with household claims relating to storm and flood damage doubling in the five years to 2003 to '6 billion.

It warned that insurers faced the prospect of these claims further tripling by 2050 if no action was taken.

A report carried out for the group found that during the 1990s extreme hot or cold weather was experienced during 34 months, compared with just 12 months during the previous decade, while the number of winter storms in the UK has doubled during the past decade.

It added that by the end of the century two out of three summers could be as hot as the heatwave of 1995, while winters are likely to become wetter.

The group is calling on the Government and other stakeholders such as builders and developers to work with insurers to help reduce the impact of climate change.

Measures that can be taken range from improving flood defences, to ensuring new housing is not built on land which is liable to flooding or subsistence, and improving building standards to ensure properties are better able to withstand storms and strong winds.

The ABI warned that unless action was taken it would become increasingly difficult for insurers to continue to offer cover to everyone at an affordable rate.

The report also highlighted that it was not just household insurance that could potentially be affected by climate change.

Liability

It said other cover could be hit, such as liability insurance if company directors were held responsible for their firms' contributing to climate change, and motor insurance, as extreme weather tended to lead to more accidents, and even health insurance.

John Parker, head of general insurance at the ABI, said: "Managing the impacts of climate change is a major challenge for society - we already live with its effects every day.

"Insurance is in the front line of climate change. Managing risk is central to our industry, and insurers must be equipped to analyse the new risks arising from climate change, and to help customers protect against them.

"The report provides the industry with a platform to ensure that appropriate action is taken by insurers, Government and other stakeholders to effectively manage climate change."

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Kyla, Manchester (08/06/2004 at 10:07)

Here's a revolutionary idea: rather than letting the blood-sucking insurance companies continue to screw the victims of natural disasters, why not divert this country's efforts towards *prevention* of climate change? I know logic is something that usually eludes most polititions, but unless they act now, they might see in the future that all their policies mean nothing, when they don't have a planet left to govern.

Phil, Derby (08/06/2004 at 14:59)

It is'nt so much the politicians Kyla, but the vested interests they represent. But then I'm sure you're aware of that. The problem is greed and putting profits before people. Our energy requirements could be halved with proper investment in insulation and conservation schemes, and create tens of thousands of jobs as well. But that does'nt suit the privatised energy companies, whether it be electricity, gas, or energy generated from wind turbines for that matter (land-based wind turbines may be non-polluting, but they scar the countryside). And the same is true of the oil lobby of course. They want to sell as much of their product as they can, and insulation and conservation would mean a reduction in consumption (and profits), as would electric cars etc. And that's the last thing they want!

Gus, Manchester (08/06/2004 at 15:08)

Pedal Power is the solution!

T J Olson, Denver, Colorado, USA (08/06/2004 at 23:12)

Of course the climate is changing. But its cause is the subject of great debate and much uncertainty.

The UK represents much less than one percent of the planet's total surface area; the US, roughly 5%. Yet extreme weather events have been in long-term decline here. Even hurricanes in the Atlantic basin have been fewer, with lower maximum winds. Yet insurance losses continue to race upwards. Why?

As wealth increases, people want vacation spots and homes closer to places with scenic amenities like the water. Hence, rising insurance costs.

It seems likely that insurance interests are out to make their forthcoming cost increases more palatable to the public - not educating the people about their real "causes."
http://www.cato.org/dailys/12-27-01.html

Mr. T J Olson
MSc student in Environmental Management, University of London

Cleo, Stockport (09/06/2004 at 13:38)

There is no uncertainty TJ, just resistance from the vested interests. End of story!

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