Climate change 'will raise bills'

Climate change will have widespread financial implications, the ABI says

Property insurance could become more expensive and harder to obtain as a result of climate change, an insurance body has said.

The Association of British Insurers said the cost of flood and windstorm damage would rise for insurers as global temperatures increased.

This would lead to higher premiums for consumers and a restriction of cover as insurers would need more reserves.

Wales and the south-west of England would be worst hit, the report said.

Financial risks

These findings have serious implications for insurers, householders, businesses and governments Nick Starling, Association of British Insurers

The report for the ABI, which included predictions from the Met Office, studied the financial effect of temperature increases of 2C, 4C and 6C.

Based on a 4C rise, the average annual insured losses from river flooding and flash floods in the UK could rise by 14% to £633m by 2060. Windstorm losses could rise by 25% to £827m each year.

However, in the south-west of England, flood damage losses could increase by 29%.

"These findings have serious implications for insurers, householders, businesses and governments," said Nick Starling, the ABI's director of general insurance and health.

"The continued widespread availability of property insurance in the future depends on taking action now to manage the threats of climate change."

World leaders are to meet in Copenhagen in December where they aim to negotiate a follow-on agreement to the Kyoto Protocol.