''With over half the world's population expected to live within 100 kilometers of the coastline in 25 years' time, it is imperative that we address this risk now by starting to adapt" said Lloyds' chief executive, Richard Ward. ''The world cannot insure its way out of climate change, but the insurance industry can play a key role in the fight against it by encouraging adaptation. If this doesn't happen, insurance will become more expensive and less available.'' 

The insurance sector has a particular interest in the outcome of the current debate as it has hundreds of thousands of coastal property and other key infrastructure on its general insurance books.  Developers, insurers and governments are all grappling with the impact of predicted rising sea levels on homes in low-lying areas close to the sea.

In Australia, insurers are suggesting the establishment of a fund into which owners of low-lying land would pay a regular levy for compensation when sea levels cause their land to become permanently unusable. The Insurance Council of Australia has estimated that over the past 12 months, severe weather has already cost about $2.2 billion in insured losses. One general insurer in Australia has estimated that the value of Australian coastal property at risk to rising sea levels and erosion is between $50 billion and $150 billion.

Detailed vulnerability mapping would be available there in 2010, but this mapping would not ban development or predict sea level rise precisely.  This is due, in part, to concerns that mapping of likely sea level rises could severely diminish property values -- the cornerstone of the wealth of thousands of people and families.

Related stories:
Investors Demand Climate Risk Disclosures
Who Will Pay The Costs Of Climate Change?