The Association of British Insurers (ABI) has warned that insurance companies could be forced to increase premiums due to climate change.
Rises in temperature forecasted for the UK are expected to "significantly" increase insurers' costs of flood and windstorm damage, and insurance would be costlier and harder to obtain.
Higher costs would trickle down through higher premiums, and insurers would also have to hold more capital in reserve for potential losses possibly leading to lower availability of cover.
Working with the Met Office and risk modelling group AIR Worldwide, the ABI analysed the financial impact of predicted temperature increases of 2C, 4C and 6C on insurers.
River flooding and flash floods could raise their average cost of losses by 14% to £633 million per year based on a four-degree rise in global temperatures, predicted by as early as 2060.
Windstorms could cause annual losses to increase by 25% to £827 million owing to forecasted changes to storm tracks along which cyclones travel.
ABI suggested that Wales and the South West could be the UK's worst affected regions, with insurers' average annual flood and wind damage losses increasing by 29% and 24% respectively if temperatures across the world rose by 4C.
The group's director of general insurance and health, Nick Starling, said: "The continued widespread availability of property insurance in the future depends on taking action now to manage the threats of climate change."
© Press Association 2009