According to the report, insurers' capital adequacy (their capital-to-risk ratio) will decline by 0.5 percent a year over the period of 2016 to 2050. To compensate for this shortfall, many insurers may have to cut their dividend payments to shareholders by 5 to 10 percent.
"Climate change could affect insurers' prospective capital adequacy through reducing earnings and by increasing the level of required capital, if its impact is not anticipated," the report says. "Earnings will be affected, not only by the potential for higher weather-related claims, but also through lower investment returns."
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The report's analysis echoes warnings made by Bank of England governor Mark Carney in September about the effect climate change will have on the insurance industry.
He pointed out that weather patterns are shifting and the number of weather-related insurance claims have tripled since the 1980s.
"The exposure of UK investors, including insurance companies, to these shifts is potentially huge," he said during the speech at a Lloyd's of London dinner. "The challenges currently posed by climate change pale in significance compared with what might come."
Carney also warned that some insurers are undervaluing their potential losses by up to 50 percent, as climate change and weather events could lead to more insurance claims.