Financial Times: Insurers will warn this week that urgent action is needed to reduce the risks from climate change if insurance is to remain affordable and widely available in the future. Insurers representing a significant proportion of the UK market, including the biggest names, will this week sign up to a number of principles, supported by the Prince of Wales, for managing and reducing the risks from climate change.
The principles will attempt to encourage individuals and businesses to mitigate the risks from climate change, and will also endeavour to influence government policy. The action comes as insurers and reinsurers face £3bn of claims from flooding in the UK, and homeowners and companies in flood-prone areas are expected to face higher premiums.
Peter Hubbard, chief executive of Axa’s UK general insurance business, and chairman of the Association of British Insurers’ working group on climate change, warned that if the risks associated from climate change were not reduced, then customers could see further price rises in the future. “If we don’t reduce the risk as an industry, in conjunction with government and other stakeholders, the incidence of floods is likely to increase and in fact premiums will go up,” he said.
The action is also being announced just ahead of annual negotiations between insurers and the government over the agreement whereby insurers pledge to continue to insure existing customers at risk of flooding.