Insurers must do more to understand the implications of climate change on their businesses or risk going out of business, Lloyd's of London said in a report released on June 05.
Recent scientific evidence on the build-up 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.
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 help protect themselves or face oblivion.
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