MONTE CARLO, MONACO–Rising sea levels and changing weather patterns could mean insurance losses for high risk properties in coastal areas could double by 2030 unless protection measures are taken, a new study warns.
The finding was made in a report released here by Lloyd's and Risk Management Solutions.
Richard Ward, Lloyd's chief executive officer, said, "Our work over the last three years supports the view that rising sea levels is absolutely one of the most important consequences of climate change." He emphasized that rising sea levels need to be "taken very seriously" by society and the insurance industry.
Mr. Ward said that although reduction of greenhouse gases is the only long-term solution to the problem, "in the short to medium term there are other things that we must do." Adaptation, he added, is a key aspect going forward.
Adaptation options, the companies said, include flood defenses, such as dykes and sea walls, moving building contents out of reach of flood waters, reinforcing building exteriors, moving or raising structures to avoid flood damage, and protecting external electrical and mechanical equipment.
In its fourth 360 risk project, "Coastal Communities and Climate Change," Lloyd's together with RMS said at a press conference that some models predict an ice-free Arctic by 2100.
At risk from rising sea levels are major cities including Miami, New York, Mumbai, Shanghai and London. What's more, the report said about half the total population exposed to coastal flooding resides in just 10 cities, with more than half the world's population set to live in coastal regions in the next 25 years.
Mr. Ward appealed to the insurance industry, which he said can play a key role in encouraging adaptation of policyholders through incentives offered. Without adaptations, he said losses could double.
"We can't insure our way out of climate change," he said, "but we certainly can get society to think about the results of climate change and the need for adaptation."
RMS CEO Hemant Shah warned that rising sea levels will bring more frequent and intense weather events. He said that adaptation plans need to be in the works, beginning today.
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