Lloyd's calls on insurers to take into account climate-change risk

Julia Kollewe in the Guardian (UK): Lloyd's of London, the world's oldest and biggest insurance market, has for the first time called on insurers to incorporate climate change into their models. The call to action comes a day after a landmark US report, named the National Climate Assessment, which has warned that climate change is wreaking havoc across the US.

Lloyd's says damage and weather-related losses around the world have increased from an annual average of $50bn in the 1980s to close to $200bn over the last 10 years. The 326-year-old insurance market, whose members write insurance business worldwide, believes the time has come for a formal call on the industry to take into account various climate-change scenarios to avoid unpredictable losses to businesses.

What the industry describes as extreme weather events have increased in number and severity as the global climate system has altered, causing more and bigger hurricanes, typhoons and heatwaves around the world. In the UK the main climate-change related risk is flooding.

...A new report by Lloyd's, which consulted the world's largest catastrophe modelling firms, says a 20cm rise in the sea level at the southern tip of Manhattan Island increased Superstorm Sandy's surge losses by 30% (up to $8bn) in New York alone.

The 840-page National Climate Assessment, published this week, was described by John Holdren, the White House science adviser, as the "loudest and clearest alarm bell to date signalling the need to take urgent action to combat the threats to Americans from climate change"...

Inside Lloyd's of London, shot by phogel, Wikimedia Commons via Flickr, under the Creative Commons Attribution-Share Alike 2.0 Generic license