Insurers must act on climate change, says Lloyd's
Sun Jun 4, 2006 7:01pm ET
By Simon Challis
LONDON, June 5 (Reuters) - Insurers must do more to understand the implications of climate change on their businesses or risk going out of business, Lloyd's of London [LOL.UL] said in a report released on Monday.
Recent scientific evidence on the buildup of greenhouse gases has shown that some degree of climate change is now inevitable and could actually happen faster than was previously expected, the report said.
"The insurance industry must start actively adapting in response to greenhouse gas trends if it is to survive," the report says.
Lloyd's, the world's leading specialist insurance market, said the insurance industry had been slow to analyse how the increasing weight of scientific evidence into climate change would affect its business.
"We believe that it is time for the insurance industry to take a more leading role in understanding and managing the impact of climate change," the report concludes.
Insurers stand in the front line of climate change in terms of footing the economic bill of natural disasters. Last year was the industry's costliest ever for catastrophes, with overall claims of $83 billion, of which $65 billion came from hurricanes Katrina, Rita and Wilma which hit the United States.
The report raises the prospect that insurers may face even higher claims from an increasing number of natural disasters in years to come, caused by climate change.
Lloyd's warns companies to take action to help protect themselves or face oblivion.
LOOKING BACKWARDS, NOT FORWARDS
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Lloyd's also raised the question of whether most weather-related risks would remain insurable in the future.
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