Insurers seek shelter from hurricanes

By Anna McLauchlin

Date: 30/06/05

The global cost of major storms is likely to increase by up to two-thirds to €22.5 billion by 2080, a study by the Association of British Insurers (ABI) has found. Ministers from the richest eight world nations will discuss tackling climate change in Scotland on 6 July.

According to the report, if no action is taken the climate change scenarios foreseen by the United Nations' Intergovernmental Panel on Climate Change (IPCC) could see the annual flood bill across Europe increase by as much as €123bn over the next 75 years.

The cost of insured damage in a severe hurricane season in the US could rise 75% to €123bn, which is an increase almost equivalent to three Hurricane Andrews; the most costly single weather event on record that occurred in 1992. And the bill for Japanese typhoons could increase to double the cost of typhoon damage last year, which was the most expensive year since 1905.

But if governments take action, the report concludes, the effects can be vastly mitigated. Reducing carbon emissions could save up to 80% of the potential costs, as well as improving flood protection and constructing more weather resistant buildings.

"Managing the effects of climate change is a key issue for the 21st century," said ABI Director Nick Starling. "Insurance is a messenger of change for future risks, as well as a provider of financial protection against the unforeseen. Governments now have a chance to make rational choices for the future, before it is too late."

Climate change is one of two major topics on the agenda for the G8 summit in Gleneagles. But on Monday (27 June), UK Prime Minister Tony Blair admitted that, in contrast to Africa, the summit's other subject, reaching consensus on the climate issue was "difficult".

According to a study by the Association of British Insurers (ABI) the global cost of major storms is likely to increase by up to two-thirds to €22.5 billion by 2080. Climate change was one of two major topics on the agenda for the July 2005 G8 summit in Gleneagles.

ABI: Climate change http://www.abi.org.uk/Publications/Preparing_the_UK_for_climate_change_-_ABIs_new_adaption_strategy1.aspx

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