Weather to hit insurance costs

Increasing global warming and climate change could cost consumers billions, the Association of British Insurers (ABI) has warned.

16:20 08 June 2004

Increasing global warming and climate change could cost consumers billions, the Association of British Insurers (ABI) has warned.

The ABI has released a report indicating the cost of household insurance will increase because of climate change, as will motor and liability insurance due to accidents caused by extreme weather conditions.

It says that claims for flood and storm damage have already nearly doubled to 6 billion over the last five years. In Autumn 2000 alone, claims reached 1 billion

The ABI has warned claims may triple by 2050.

Speaking to BBC Radio Four's 'Today' business slot, the head of general insurance at the ABI, John Parker, said: "The Government itself has said climate change is one of the biggest risks the UK faces and we agree with that.

"What we want to do is analysis what those risks are, so we can take preventative action now."

The ABI has predicted that by 2050 subsidence claims could have risen to 600 million, storm claims to 800 million and flood claims to 800 million a year.

Mr Parker warned: "In future decades there is a prediction that long hot summers would occur two out of three years, so insuring subsidence risk would be very difficult."