The science of climate change might remain controversial among skeptics, but within the insurance industry there is a growing consensus that the risks are real, and that carriers must deal with the growing exposures as well as seize the opportunities the problem presents.

In a report released by Ernst and Young--"Strategic Business Risk: Insurance 2008"--the consulting firm reviewed the top-10 strategic risks insurers face, placing climate change atop the list and calling it "a long-term issue with broad-reaching implications that will significantly impact the industry."

Changes in weather patterns caused by climate change "will bring about a fundamental shift in the underlying probability of insured loss (by windstorm or flood) and require insurers to scrutinize their insurability criteria for certain risks," the report concluded.

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