New research shows most insurance companies have not integrated climate change into their risk management practices, nor adjusted premium trends to the increasing frequency and severity of natural catastrophes.

The study by the University of Waterloo in Canada examined data from 178 insurers.

Insurers that ignore climate change will need to raise premium rates or pull coverage from high-risk areas to recoup losses from unexpected claims, the study paper warns.

Co-author Jason Thistlethwaite says many people will lose coverage or it will become unaffordable.

Reinsurers have been better at adapting to climate change risk, rescaling their risk management practices, the study shows.

Mr Thistlethwaite says organisations that best understand climate change will survive.

The study comes after Finity Consulting Principal Tim Andrews warned some insurers may be underestimating climate change-related increases in natural peril costs.