Tuesday, 28 June, 2005

Storm costs 'could rise by 66%'

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). 

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. 

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.