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Environment minister Elliot Morley today welcomed the Association of

British Insurers' report (see below) which says claims for storm and flood

damages could treble by 2050 because of the impact of climate change.

He said:

'The insurance industry is right to point out the potential impacts

on its businesses and customers and I welcome their report; the

industry, with its expertise in managing risk, is an important

contributor to tackling climate change. We have already increased the

annual spending on flood defences from around£300m in 1996/7 to

over£400m in 2004/5.

'Climate change is with us already and its impacts over the next few

decades are now unavoidable. In the UK, we are likely to experience

hotter, drier summers and warmer, wetter winters, and weather

extremes like the hot summer of 2003 or the heavy rain leading to the

floods in 2000 may become more common.

'Our changing climate is bringing with it an increasing number of

weather-related insurance claims - the report notes that storm and

flood damage claims could triple by 2050. But climate change will

have broader effects on the insurance industry, through changing

customer needs, the regulatory framework and the implications for


'The UK ratified the Kyoto Protocol in 2002 and we are also committed

to achieving our more challenging goals of reducing carbon dioxide

emissions by 20 per cent below 1990 levels by 2010 and by 60 per cent

by 2050.

'The Foresight Report on flooding, commissioned by government and

published last month, was a valuable contribution to the debate and

will feed into the 20 year strategy that Defra is drawing up to set

out the direction of future flood management policy.

'We have already increased the annual spending on flood defences from

around£300m in 1996/7 to over£400m in 2004/5. We have provided

guid ance for some time now on climate change allowances for flood

defences and these are kept under review.

'The ABI also point to the costs of heatwaves and storms; although

the government can take action to mitigate the effects of these, we

need to tackle - via international agreement - the causes of climate



1. A copy of the report is available here.

2. * The Foresight full report, summary, and a separate report for

Scotland, can be found at

Hard copies are available from Tel: 0870 1502500

3. * The government funds the UK Climate Impacts Programme (UKCIP) to

help public and private sector organisations to assess their

vulnerability to climate change and plan their own adaptation

strategies (

* Investors have already begun to look at the issues that climate

change will present to them, through the Institutional Investors

Group on Climate Change (IIGCC, )


Action to manage climate change risks can help ensure that widespread insurance cover remains readily available according to a report published today by the ABI (Association of British Insurers). A Changing Climate for Insurance analyses for the first time the practical implications of climate change for a key business sector and its customers. The report identifies the need for action by insurers and government to manage climate change.

The report, prepared by Andrew Dlugolecki, an international authority on climate change, highlights the impact that climate change is already having on the insurance industry, notably in changing patterns of claims arising from a greater incidence of extreme weather. It points to the need for a partnership approach between the industry and government to prepare for the effects of climate change.

The report highlights the effects that changing weather patterns are already having:

- in the 1990's there was a significant increase in the number of months of both extreme hot and wet weather. During this decade there were 34 months of extreme hot weather, compared to a previous average of just 12 months per decade.

- the number of winter storms crossing the UK has doubled in the last 50 years;

- Weather- related claims on property insurance have doubled to over£6bn between 1998 to 2003, compared with the previous five years. The report predicts that claims could treble if no action is taken.

Other sectors of insurance, such as health, motor and liability insurance could also be influenced by changing weather patterns.

'Managing the impacts of climate change is a major challenge for society - we already live with its effects everyday', said John Parker, the ABI's head of general insurance.

'Insurance is in the front line of climate change. Managing risk is central to our industry, and insurers must be equipped to analyse the new risks arising from climate change, and to help customers protect against them.

'This report provides the industry with a platform to ensure that appropriate action is taken by insurers, government and other stakeholders to effectively manage climate change.'


1. The report was prepared for the ABI by Andrew Dlugolecki. A chartered insurer with a PhD in Economics, he held a series of senor positions in the insurance industry and left Aviva plc in December 2000. During his career he became known for his work on climate change. Dr Dlugolecki has contributed to UK government reviews and chaired two research reports on climate change for the Chartered Insurance Institute.

2. The ABI is the trade association for Britain's insurance industry. Its more than 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the government, and to the regulatory and other agencies, and is an influential voice on public policy an d financial services issues. ABI member companies hold more than a fifth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

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