There is a growing trend towards insurance industry corporate groups embracing measures for dealing with climate change.

The groups include reinsurers, such as Swiss Re, which is dealing with rising claims from floods and storms, as well as insurers such as IAG, which has just signalled it is going carbon-neutral within five years.

In October 2003, Swiss Re announced a 10-year plan to become carbon neutral. The reinsurer also supports the Kyoto protocol to limit emissions of greenhouse gases, as well as the new round of talks in Nairobi to extend the agreement.

IAG says it’s committed to pushing for more action on climate change and will be carbon neutral in five years. CEO Michael Hawker says IAG will have to calculate the amount of carbon dioxide emitted from its operations, then buy the equivalent amount of carbon offsets.

Carbon offsets usually involve planting trees or funding sustainable-growth forests. They can also involve buying energy from renewable sources such as wind, solar or geothermal plants.

IAG says 19 of the 20 biggest insurance events in Australia have been weather-related and that five of the 10 largest global insurance losses have occurred in the past two years.

“We have been working on ways of reducing our own carbon dioxide emission footprint, alerting the community about the risks of climate change and researching opportunities for our customers to benefit from carbon dioxide reducing activities,” Mr Hawker said.

In the past 12 months IAG has reduced carbon emissions by 6% across its Australian and New Zealand operations.

Swiss Re Chief Economist Thomas Hess says claims from natural catastrophes are rising twice as fast as those from other mishaps. “Claims for natural catastrophe insurance are rising roughly 10%. If you’re a cynic, you could say it’s a growth market.”

Some observers say last year’s record storms highlighted a shortfall of billions of dollars that insurers needed to underwrite risk, and they might lose market share if they don’t find the extra money.

“Prices for hurricane cover in the US have in some cases doubled after last year’s storms, and some insurers refuse to underwrite such risks in certain areas,” Mr Hess said. “But there was no overall shortage of insurance cover.”