NU Online News Service

A global temperature spike of 7.2 degrees Fahrenheit (4 Celsius) on average would increase insured flood losses in Great Britain 14 percent and Chinese typhoon losses 32 percent, a study has found.

If that occurred it could lead to more expensive and harder to obtain insurance worldwide, and in the United Kingdom, the Association of British Insurers (ABI) said, commenting on a report yesterday by catastrophe risk modeling firm AIR Worldwide and the Met Office, the UK National Weather Service.

If the U.K. average annual insured losses from river flooding and flash floods should rise by 14 percent it would mean a loss increase of ?633 million ($1.05 billion), based on a four-degree rise in global temperatures which could occur as early as 2060, ABI noted.

The average annual windstorm losses could rise by 25 percent to ?827 million ($1.37 billion), due to changes in 'storm tracks', along which cyclones travel, ABI said.

The estimated insured cost of extreme flood losses occurring on average once every 100 years in Great Britain would rise by 30 percent to ?5.4 billion ($9 billion) and costs of windstorms occurring on average once every 100 years could rise by 14 percent to ?7.3 billion ($12 billion).

Wales and the south west region of the UK could be most badly affected, according to the study. In the south west, average annual flood and wind damage insured losses could rise by 29 percent and 24 percent respectively.

In China, average annual insured losses from typhoons could jump by 32 percent to ?345 million ($573 million), based on a global temperature rise of four degrees.

The report is titled, "Financial Risks of Climate Change."

Ming Lee, president and chief executive officer of AIR Worldwide, said in a statement, "Our research team has once again extended the state of the science by coupling climate model projections with state-of-the-art catastrophe models. The results of this collaborative endeavor provide the insurance industry for the first time with a quantification of the potential impact of climate on insured risks in the UK and China."

Nick Starling, the ABI's Director of General Insurance and Health, said, "These findings have serious implications for insurers, householders, businesses and governments. The continued widespread availability of property insurance in the future depends on taking action now to manage the threats of climate change.

"A two-degree temperature rise may be inevitable, but we can limit further increases. The clear message to world leaders meeting at the U.N.'s Copenhagen Climate Change Summit in December is that they must reach agreement on ambitious emission reduction targets. And, closer to home, the UK Government needs to push ahead with the Flood and Water Management Bill, and ensure long-term investment in flood management as a priority, so that the long-term flood risk is better managed."

Special Reports /

Global Warming Of 7 Degrees Would Mean Billions Of Insured Loss, Says Study

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