The insurance bill for extreme weather events and rising sea levels is set to increase tenfold - from £20bn a year to £200bn a year by 2050 - making parts of the world uninsurable, the world's leading insurers have warned.
"Climatic changes could trigger worldwide losses totalling many hundreds of billions of dollars a year," Dr Gerhard Berz, head of research for the largest re-insurance company in the world, Munich Re, told the United Nations' Environment Programme (Unep) in Nairobi. "The burden of claims resulting from so-called natural catastrophes has already taken on dramatic dimensions.
"There is mounting evidence of increasing frequency and intensity of natural catastrophes. Major windstorms set new loss records almost annually, while innumerable flood, tempest, drought and forest fire emergencies now seem to occur more frequently than ever before."
Losses caused by the weather in the 1960s totalled £30bn (in today's prices); in the 1990s that figure rose to £250bn. But as greenhouse gas pollution increases, the bill is set to rise more dramatically, to £200bn per year by 2050.
More than 100 environment ministers, including Britain's Michael Meacher, are meeting in Nairobi on Monday to discuss climate change.
Dr Berz fears the losses will bankrupt parts of the industry and wants government action to halt climate change. "There is reason to fear that climatic change in nearly all regions of the Earth will lead to natural catastrophes of hitherto unknown force and frequency," he said. "Assessing these developments could jeopardise the future of entire industries in some regions."
Before 1987, only one hurricane - Alicia in Texas in 1983 - cost £1bn in claims. Since then, 29 have cost that much.
Munich Re's estimates are based on predictions by the Intergovernmental Panel on Climate Change (IPCC) that carbon dioxide levels in the atmosphere will double by 2050.
The IPCC's previous report in 1996 saw no link between global warming and the increased frequency and intensity of extreme atmospheric events, Dr Berz said, but studies and simulations since have provided new evidence.
Dr Berz is particularly concerned about the effect on Europe where he says the pattern of insurance losses shows that climate change has already begun. Flooding on the Rhine in December 1993 and January 1995, and in England in 2000 are examples. Ever more frequent and heavier downpours are predicted.
"These milder winters have also reduced the extent of snow-covered areas above which stable, high-pressure zones of cold used to form, creating a barrier against low-pressure storm fronts approaching from the Atlantic," said Dr Berz. "So this barrier is often weak or has shifted far to the east. German wind records indicate a marked increase in the number of windstorm days in recent decades."
He says annual losses from a rise in sea level and flooding in low-level islands such as the Maldives, the Marshall Islands and the Federated States of Micronesia in the Pacific would exceed 10% of their GDP by 2050.
Klaus Toepfer, executive director of Unep, said the report was of great concern. Unep is working on a vulnerability index to warn governments which of their countries are most likely to be hit by extreme events, causing loss of life and property.
"The time to act is now," Mr Toepfer said. "The world has already signed up to a certain level of human induced climate change as a result of over a century of industrial emissions. We must help vulnerable areas of the world, primarily in the developing world, to adapt to the consequences of global warming."
Countries such as the US would lose £5bn a year because of damage to agriculture, while the EU would stand to lose up to £6bn.
The cost of premature death due to rising numbers of heatwaves is put at £14bn a year within the EU and £11bn in the US. Worldwide, the cost of premature death caused by heatwaves is put at £50bn.
© Guardian Newspapers Limited 2001