Thursday, November 5, 2009

Insurance sector can't cope with climate change: trade group

Reuters: The general insurance industry may not be able to cope with the increased frequency and severity of floods and typhoons brought about by climate change, the Association of British Insurers (ABI) said on Wednesday.

ABI research, commissioned from Britain's Met Office and catastrophe risk modeling firm AIR Worldwide, examined the implications of 2 Celsius, 4C and 6C increases in global mean temperature on inland flooding and windstorms in Great Britain, and typhoons in China.

The ABI says a 2C is rise inevitable and this will increase average annual insured losses in Britain from inland flooding by eight percent, or by 47 million pounds ($77 million), to 600 million pounds. This would indicate a 16 percent theoretical impact on insurance pricing (with an annual GDP growth of 2.25 percent assumed).

Nick Starling, the ABI's Director of General Insurance and Health, told the Climate Change conference in London that the continued widespread availability of property insurance in the future depends on taking action now to manage the threats of climate change….

Trees on the Jersey Shore, watercolor over graphite by William Trost Richards, 1871

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