Sandy Maxwell says the insurance industry must lobby for change

' Climate change is a real and present danger to the insurance industry. That's the message insurers are increasingly hearing from scientists.

Insurers have been concerned about environmental catastrophe for a long time now.

Back in mid-2004, the ABI produced a comprehensive report on the need to manage risks and the problems of subsidence and flooding.

The report called for "the need to continue to invest in flood management".

A few months later, Munich Re's Thomas Loster issued this blunt warning: "We need to stop this dangerous experiment humankind is conducting on the Earth's atmosphere."

There is a growing acceptance of the scientific evidence that mankind's activities are having a potentially irreversible effect on the planet.

Dr Julian Salt, a leading climatologist, last week painted a bleak picture of a future dominated by rising sea levels, melting ice caps and hurricanes.

But, despite the growing consensus, actual political progress is piecemeal at best.

The recent Montreal Conference on Climate Change has been described by participants as "talks about talks" and the Kyoto Protocol as a "dead duck".

Meanwhile, businesses are being left in limbo as there is continuing uncertainty over whether environmental policies will continue beyond 2012.

And back in the UK, the ABI has demanded that investment in flood defences "must continue to rise in real terms over a sustained period".

It has called on the Treasury to release funds to deal with an estimated £700m shortfall, as Insurance Times reported on 26 January.

But governments with one eye on the next election are loath to take unpopular short-term decisions for long-term environmental rewards.

And voters are still unable to make the link between personal lifestyle and global warming.

It is doubtful whether the existing model of adaptation and mitigation can work. Salt supports a "completely different approach" based on "contraction and convergence" - a simple, global, equity-based, incentivised system based on emissions trading.

But this will involve richer countries agreeing to a level playing field with poorer countries...unlikely when the US has refused to sign the Kyoto Protocol.

The insurance industry must do all it can to lobby for change or all the arguments about risk management and containment will become irrelevant by the time the next generation of underwriters and brokers achieve maturity. IT

' Insurance Times has organised a major conference on the implications of climate change. Forces of Nature is taking place at the Grocers' Hall, London EC2 on 20 March. Contact Sarah Pope on 020 7618 3470 or for more details.