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Last Updated: Tuesday, 28 June, 2005, 22:58 GMT 23:58 UK
Storm costs 'could rise by 66%'
Tropical storm hitting Florida coast
The global cost of major storms could rise by 66%, the report says
The worldwide cost of major storms will rise by two-thirds unless governments start taking immediate action to reduce global warming, a report has warned.

The average annual global clean-up cost will rise to 15bn ($27bn) by 2080 without such efforts, the Association of British Insurers (ABI) said.

It said these costs could be reduced with more effort to cut emissions of carbon and improved coastal defences.

The ABI also called for more weather-resilient buildings.

It said its Financial Risks of Climate Change report was based upon international scientific research from the Intergovernmental Panel on Climate Change (IPCC).

Flood management

Without extra efforts to cut global warning, the ABI said the cost of insured damage in a severe hurricane season in the US could rise by three-quarters to 82m.

Governments now have a chance to make rational choices for the future, before it is too late
ABI director of general insurance Nick Starling

The cost of Japanese typhoons could also increase by three-quarters to 19bn per annum, while the cost of flooding across Europe would hit 82m a year, the ABI said.

It added that if governments successfully reduce carbon emissions, the size of insurers' capital requirements for hurricane, typhoon and windstorms could be cut by more than 33bn.

Effective flood management in the UK could save 80% of the costs of flood damage, while better building design could "significantly" reduce windstorm damage, the group said.

"Governments now have a chance to make rational choices for the future, before it is too late," said ABI director of general insurance Nick Starling.

"Making the right decisions based on first class assessment of the financial costs of climate change will ensure lower costs for the public in future."

The ABI is the trade association for the UK insurance industry.

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