Individuals should bear risk of living in catastrophe exposed regions, says Catlin
Insurers have been challenged to join forces in the fight against climate change.
Delegates at a seminar on climate change, held by City law firm, Reynolds Porter Chamberlain (RPC), threw down the gauntlet to insurers and accused them of being the "authors of their own misfortune."
Insurers could face the ultimate cost of climate change and should under-stand the real impact of its liabilities, delegates claimed. One delegate said: "The industry is portrayed as picking up the bill, but I have not seen any insurers jointly drive this issue forward."
He suggested the industry should be bold enough to tell relevant authorities that it is not prepared to insure properties in areas affected by climate change, such as those built on UK flood plains.
Alex Hamer, a partner with RPC, said the ABI could be a "very useful body" through which insurance companies could demonstrate their argument. But, he added, until it became unattractive for insurers to cover such property risks it would continue to look to make profits.
Hamer suggested that insurers should monitor policy wordings, exclusions and coverage limits in relation to catastrophe events and participate in programmes, such as those which attempt to control development and settlement in risk prone areas.
He added: "Responding to climate change requires a long term review of business and underwriting strategy. It is plainly impossible for insurers alone to bear the entire burden of climate change."
Stephen Catlin, chief executive of Lloyd's insurer Catlin, agreed. He suggested that individuals who wished to live in catastrophe exposed regions must assume financial responsibility for their decision, including bearing the high cost of insurance.