US insurers are mostly unprepared for climate change and are not taking the issue seriously enough, according to a report by advocacy group Ceres.

In a National Association of Insurance Commissioners (NAIC) survey, only nine of 330 companies gained “leading” status on a four-tier scoring system.

The vast majority earned “beginning” or “minimal” ratings.

The top-rated companies were Ace, Allianz, The Hartford, Munich Re, Prudential, Sompo Japan, Swiss Re, XL Group and Zurich Insurance.

Only 38 of the surveyed insurance companies have issued public climate risk management statements on implications for underwriting and investment portfolios.

Mike Kreidler, Washington Insurance Commissioner and Chairman of the NAIC climate change and global warming working group, says industry leaders and investors should take the matter more seriously.

“There is no doubt that an early effort to adjust policies, premiums and insurance investments will result in less dramatic impacts later on, thus avoiding and reducing losses that we can already anticipate,” he said.

General insurers are ahead of life, annuity and health insurance providers on the issue, but the report says most participants are not addressing the risks comprehensively.

Ceres recommends that state regulators require insurers to file climate risk responses. It also suggests more work with ratings agencies and creation of a climate science research database for insurers to access.

Climate change should be included in wider company risk management strategies, and there should be a greater focus on developing modelling tools, the report says.

“Despite being on the front line of climate risks, most of the company responses show a profound lack of preparedness in addressing climate-related risks and opportunities,” Ceres President Mindy Lubber said.

The report warns growing potential for climate-related legal action will have implications for professional liability and errors and omissions insurance, plus directors’ and officers’ liability.