Insurers warn of rising costs of climate change
The Association of British Insurers (ABI) has said action is needed to manage the potential cost of climate change.
In a new report, it warns that property insurance claims due to weather damage could treble by 2050 if action is not taken.
The report claims that climate change is already having a noticeable effect on the insurance industry, specifically in increased incidences of extreme weather such as storms and floods.
The ABI state that weather related property insurance claims have doubled over the last ten years and predicts they could treble without action.
It estimates that in the 1990s there was a significant increase in months of “extreme weather” (both hot and cold) to 34 months, compared to the previous decade average of 12.
John Parker, head of general insurance at the ABI said: “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.”
Responding to the report, Environment Minister Elliot Morley said that the Government is already acting.
Mr Morley said: “Climate change is with us already and its impacts over the next few decades are now unavoidable. In the UK, we are likely to experience hotter, drier summers and warmer, wetter winters, and weather extremes like the hot summer of 2003 or the heavy rain leading to the floods in 2000 may become more common.
“The insurance industry is right to point out the potential impacts on its businesses and customers and I welcome their report; the industry, with its expertise in managing risk, is an important contributor to tackling climate change.
“We have already increased the annual spending on flood defences from around £300m in 1996/7 to over £400 m in 2004/5.
Mr Morley emphasised that intervention was needed on an international level to tackle the causes of global warning.
Both the Liberal Democrats and the Greens are critical of the Government’s environmental record.
Launching the Lib Dems’ environmental manifesto today, Charles Kennedy said: “It is not an overstatement to say that as a planet we are facing an environmental disaster. 20,000 people died in Europe last year in the summer heat wave that the World Health Organisation linked directly to climate change.
“If we are to really get to grips with the consequences of the way we are living, and start living more sustainable lives, action at the European level makes perfect sense.”
Mr Kennedy called for Tony Blair to place pressure of the US to tackle its carbon emissions.
Darren Johnson, the Green Party London mayoral candidate said: “The political and corporate response to this problem has been grossly inadequate. If the Prime Minister believes the situation is very, very critical, then he should take advice from the Greens.
“He should tax aviation fuel, stop the road-building programmes and airport expansion schemes, implement a carbon tax and invest massively in renewable energy technologies.”
