Insurers and the government need to take action on climate change in order to ensure that widespread insurance cover remains readily available, warned the ABI.
It issued the warning as it published its climate change report, ‘A Changing Climate for Insurance', which analyses the practical implications of climate change on the insurance sector.
The report is available for download from www.abi.org.uk/climatechange
The report, prepared by Dr Andrew Dlugolecki, highlights the impact climate change is already having on insurance, said the ABI. Examples include changing patterns of claims arising from a greater incidence of extreme weather.
The ABI said there was a need for a partnership approach between the industry and the government to prepare for the effects of climate change.
The report also highlights the effects that changing weather patterns are already having:
· In the 1990’s there was a significant increase in the number of months of both extreme hot and wet weather. During this decade there were 34 months of extreme hot weather, compared to a previous average of just 12 months per decade.
· The number of winter storms crossing the UK has doubled in the last 50 years;
· Weather-related claims on property insurance have doubled to over £6bn between 1998 to 2003, compared with the previous five years. The report predicts that claims could treble if no action is taken.
Changing weather patterns could also influence other sectors of insurance, such as health, motor and liability insurance, said the ABI.
"Managing the impacts of climate change is a major challenge for society, we already live with its effects everyday," said ABI head of general insurance John Parker.
"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.
"This 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."
