Damage costs could increase by as much as two-thirds by the end of the century if climate change continues to affect the intensity of extreme storms, according to the Association of British Insurers (ABI).

A new ABI report looks at the costs of extreme storms such as hurricanes, typhoons, and windstorms in the major insurance markets of the US, Japan, and Europe, and says annual insured and uninsured losses from such storms could reach $36 billion by 2080.

The report says an additional $101 billion could be needed to cover the gap between extreme and average losses resulting from tropical cyclones in the US and Japan, while higher capital costs combined with greater annual losses from windstorms alone could result in premium increases of around 60% in these markets.

ABI Director of General Insurance Nick Starling says many of the potential costs described in the report could be avoided by taking action now, and governments should be taking into account the financial ramifications of climate change.

“The most extreme storms could become even more destructive, leading to losses greater than we have seen before,” he said. “Insurance markets could become more volatile, as the costs of capital required to cover such events increase.”