The insurance industry needs to adapt now to manage the effects of climate change, warned Sustainable Energy Minister Larry Whitty.
Speaking at the launch of the Living with Climate Change in the East of England study, Whitty said insurance companies needed to understand and respond to the challenges while there was still time to do so effectively.
“We have to prepare for some degree of climate change. Government is already working to improve flood defences and our planning system, for example. We must do what we can - locally, nationally and globally – to minimise the effects of climate change while preparing for the possible consequences,” said Lord Whitty.
The impact of climate change on eastern England over the next 50 years is expected to include hotter, drier summers; milder, wetter winters; a rise in sea level and an increase in extreme weather events, said the report.
As a result, some premiums may need to rise and insurers may consider reducing coverage in certain areas to successfully adapt to the changes. The consequences could be significant if the effects of climate change are not effectively and promptly understood, warned Whitty.
He said insurers should begin considering opportunities for new geographical markets in which climate change impacts are less volatile.
