The report does suggest actions that governments can take to reduce these costs. For example, reducing carbon emissions could result in savings of up to 80 percent of the predicted extra costs, the study estimates. Governments also should continue to improve coastal defenses and flood protection, and change building codes to ensure more weather-resilient buildings.

If no action were taken, however, the insurance industry could face a number of adverse financial challenges, the ABI warned. By the year 2080, the cost of insured damage in a severe hurricane season in the United States could rise by 75 percent, to $150 billion, an increase equivalent to almost three Hurricane Andrews. The costs of Pacific hurricanes also could increase, by as much as two-thirds, while insured losses from flooding could rise in the United Kingdom and Europe.

The study's authors emphasized that the loss estimates do not include likely increases in society's exposure to extreme storms, due to growing, wealthier populations, and increasing assets at risk. For example, if Hurricane Andrew were to have hit Florida in 2002 rather than 1992, the losses would have been double, due to increased coastal development and rising asset values.

The uncertainty of the rising costs would render insurance markets more volatile. The study's authors estimate that the capital needed by insurers to cover severe storms could rise by $78 billion, with increases of 90 percent for U.S. hurricanes and 80 percent for Japanese typhoons.

ABI commissioned and funded Climate Risk Management and Metroeconomica to carry out the research. The catastrophe modeling work was undertaken in collaboration with AIR Worldwide, while Risk Management Solutions provided data from U.S. hurricane models. The climate change scenarios were based on research by the Intergovernmental Panel on Climate Change.

The report called for further studies on the impact of climate change impacts where there is limited scientific consensus at present.