The Financial Risks of Climate Change

"The Financial Risks of Climate Change" was produced for the ABI by climate catastrophe risk modelling experts AIR Worldwide Corporation and the Met Office. Using current climate and insurance catastrophe models, it examined the financial implications of the widely predicted temperature increases of two, four and six degrees Celsius on the insured cost of flood and windstorm damage in the UK, and of typhoons in China.

The study highlights that:

·In the UK, the average annual insured losses from river flooding and flash floods could rise by 14% to £633 million, based on a four-degree rise in global temperatures which could occur as early as 2060. The average annual windstorm losses could rise by 25% to £827 million, due to changes in ‘storm tracks’, along which cyclones travel.

·The insured cost of extreme flood losses occurring on average once every 100 years in Great Britain could rise by 30% to £5.4 billion. The costs of windstorms occurring on average once every 100 years could rise by 14% to £7.3 billion.

·Wales and the south west region of the UK could be most badly affected. In the south west, average annual flood and wind damage insured losses could rise by 29% and 24% respectively.

·In China, average annual insured losses from typhoons could jump by 32% to £345 million, based on a global temperature rise of four degrees.

According to Nick Starling, the ABI’s Director of General Insurance and Health, “These findings have serious implications for insurers, householders, businesses and governments. The continued widespread availability of property insurance in the future depends on taking action now to manage the threats of climate change. A two-degree temperature rise may be inevitable, but we can limit further increases. The clear message to world leaders meeting at the UN’s Copenhagen Climate Change Summit in December is that they must reach agreement on ambitious emission reduction targets. And, closer to home, the UK Government needs to push ahead with the Flood and Water Management Bill, and ensure long-term investment in flood management as a priority, so that the long-term flood risk is better managed.”

Rainwater as a Safe Drinking Water

An Australian study said that drinking untreated rainwater is safe for the health. Researchers from Melbourne's Monash University looked at 300 homes that used rainwater as their primary drinking source.



The study confirms that expanded use of rainwater for many household purposes can be considered and in current times of drought, rainwater should be encouraged as a resource.

The study came amid growing concern about the environmental impact of bottled water products, which are often transported long distances and packaged in plastics which clogs landfills.

DID YOU KNOW?

Research using the Met Office's Climate Model in UK supports the suggestion that low-level clouds may be reduced by climate change, causing further global warming. Low-level clouds such as stratocumulus, play a vital role in keeping the Earth's climate cool by reflecting sunlight and climate researchers have been studying how they might react to a changing climate on a regional scale.