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This report, authored by Allianz Group and WWF, states that the insurance industry should do more to address the growing impact of climate change-induced damages.

The report stresses that climate change has the potential to significantly alter and intensify destructive weather patterns in the U.S. , leading to increased flooding, forest fires, and storm damage. It finds that the most direct risk to the U.S. will likely come from hurricanes, which are expected to become more frequent and powerful, and cites rising sea levels and forest fires as other significant risks.

The report provides several concrete recommendations for addressing the potentially adverse consequences of climate change in the U.S. One key recommendation is for both governments and insurance companies to help correct market distortions and communicate appropriate signals to homeowners, businesses, and consumers moving into high risk areas. The report points to the need by regulators to consider carefully the impact of programs like the National Flood Insurance Program, which keep insurance rates artificially low. By masking the real price of risk, such policies encourage overdevelopment in high risk areas.

In addition, the report suggests U.S. insurers begin incorporating future potential climate change impacts such as continued sea level rise and longer fire seasons into planning, rather than relying only on historical data of past weather events.

The report also recommends that insurers influence land use development and planning in high risk areas. For example, conserving coastal mangroves provides a natural buffer from storms, surges and waves; forest preservation can reduce mudslides. Another way to minimize losses related to climate change, the report says, is to promote storm-resistant and energy- efficient building materials, improved building codes, and better public education about their benefits.

For further information visit the Allianz and the World Wildlife Fund websites.

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