Will climate change make your house uninsurable?

Lloyds of London is one of the pillars of the business world. Since it came into being in 1688, the insurance house has facilitated world trade – by insuring shipping and other major ventures abroad. The establishment is famous for its Lutine Bell, which was salvaged from a bullion ship, and was traditionally rung to herald important announcements to underwriters and brokers. One stroke for bad news, two for good, the bell is recognised throughout the world as the symbol of the organisation whose fortunes are linked inextricably with natural and man-made catastrophes.

At the turn of the year, addressing the World Affairs Council in Washington, Lloyds’ chairman Lord Levene metaphorically rang the Lutine Bell – once. ‘Today the insurance industry faces the prospect of a $100 billion national disaster – twice the size of Katrina,’ he told his audience. ‘We need to wake up to the truth about catastrophe trends and radically review our public policy.’

The figures underlying his statement are stark. Since the Seventies, insurance losses have risen at an annual rate of around 10 per cent, reaching $100 billion dollars in 1999. Losses of this scale are ominous, meaning...

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