Climate change 'may hit insurers'
The price of insurance will go up if changes predicted by climate change experts come true, the Association of British Insurers (ABI) has warned.
The group said that rising sea levels and a temperature increase could make insurance premiums “significantly” more expensive and cover harder to obtain.
It added that the average cost of losses to insurers from river flooding and flash floods could rise by 14 per cent to 633 million pounds a year if global temperatures rose by 4C, which could happen by as early as by 2060.
Annual losses as a result of windstorms could also increase by 25 per cent to 827 million pounds due to predicted changes to storm tracks, along which cyclones travel.
Wales and the South West would be the worst affected regions of the UK, the organisation’s research found, with average annual flood and wind damage losses for insurers jumping by 29 per cent and 24 per cent respectively.
The ABI warned that such developments could feed through into higher premiums for consumers and may lead insurers to hold more capital in reserve for potential losses - a move that could severely restrict the availability of cover.
Nick Starling, the ABI's director of general insurance and health, said: “The continued widespread availability of property insurance in the future depends on taking action now to manage the threats of climate change.”
Copyright © Press Association 2009
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