Insurers pledge to tackle climate change

LONDON (Reuters) - Leading insurers, hit by rising claims from "extreme" weather, signed up on Thursday to a list of green principles that they say will push the industry to help mitigate and better manage the risks of climate change.

The industry is among those at the forefront of climate change research as around one-third of all overall claims are from weather-related natural disasters.

Insurers faced a bill of over $83 billion (41 billion pounds) for damages from U.S. hurricanes in 2005 and this year claims are again rising fast, after the Kyrill storm in January, heavy UK floods this summer and, so far, two 'category 5' hurricanes.

Thursday's pledges -- signed up to by giants from AIG (AIG.N) to Zurich (ZURN.VX), and led by the UK trade body -- include the commitment to carry out more research on climate change, to develop improved risk analysis, to engage in public campaigns and the commitment to make customers greener by selling policies like "pay-as-you-drive" insurance, which encourages people to leave their cars at home.

The insurers also agreed to incorporate climate change into investment strategies and to make their businesses greener.

"The industry has been doing a lot," Stephen Haddrill, director general of the Association of British Insurers, said.

"What we are trying to do here is raise the game."

The ABI says it hopes to set a standard of "best practice" that insurers beyond the initial founding partners will follow.

Without this, it said, premiums could rise across the board, for life, property and health insurers, and some customers, in flood prone areas for example, could find themselves "uninsurable", as a result of poor risk management.