The storms that wreaked havoc across Britain and France last October cost insurers some £500m, according to Swiss Re.

The scale of the flood damage made it the second worst natural disaster in terms of insurance losses for the year 2000.

The worst natural catastrophe resulted from the Tokai floods in Japan and cost insurers £660m.

The flooding in 2000 made the year one of the worst on record in terms of losses, which hit a total of £1.6bn.

In its round-up of bad insurance losses for 2000, Swiss Re said natural and man-made catastrophes cost the worldwide insurance industry £7bn.

This is one-third of 1999's figure of £21bn – when nine storms and earthquakes each caused losses in excess of £660m.

The I Love You computer virus was the most significant man-made disaster in terms of financial loss in 2000. But the £2bn cost of man-made losses was significantly below the average for the 1990s. Major fires cost £866m of the total, aerospace losses £660m and aviation losses £264m.

The Association of British Insurers (ABI) has called for increased spending on flood defences.

Mary Francis, director general of the ABI, said: “Scientists tell us that we can expect to see an increase in the flood risk in many parts of the UK over the next 50 years.

“And, if we are to minimise the risk of future property losses, and keep as many properties as possible insurable at a manageable cost, it is crucial that all those with an interest in the planning process work together efficiently.”

She said this should mean avoiding building new housing developments in flood plain areas. The ABI estimates that spending on flood defences will have to double, costing an additional £170m.