Climate change is "an underwriter's worst nightmare" as its unpredictable effects make assessing risk an increasingly difficult task.

That is the view of an expert on the subject, Andre Logan, of Ceres, a non-profit organisation which directs the Investor Network on Climate Risk (INCR.), who says climate change related risk will have a broad impact across virtually all insurance lines.

ICNR represents some 60 investors with $5 trillion in assets.

Speaking during a session on climate change at the International Reinsurance Summit at the Fairmont Hamilton Princess on Wednesday, Mr. Logan said insurers could also benefit by producing new products to address climate change risk.

He said that more organisations were being sued in global warming-related cases, as big greenhouse gas producers were blamed for rising temperatures and rising sea levels.

"Climate change is the new asbestos for insurers," Mr. Logan said.

He highlighted the case of Kivalina, an Alaskan peninsula whose population of 377 people are having to be relocated at a cost of $400 million, because of coastal erosion.

The people of Kivalina have responded by filing a lawsuit against 24 oil, gas and electric companies, including giants Exxon Mobil, Chevron, and Duke Energy, whom they hold responsible for causing a public nuisance.

Warming of the planet has led to the melting of the permafrost, or permanently frozen topsoil, which helped protect the peninsula from storms in the past. Rising sea levels have exacerbated the problem. In 2004 and 2005, between 70 and 80 feet Kivalina was cut off the Kivalina coastline by erosion, threatening many of its 150 structures and making it unsafe to continue living there.

The companies are generally not commenting, except to say that climate change is not an issue for the courts.

The Kivalina suit alleges that energy companies conspired to create a false sense of doubt about effects of global warming.

Mr. Logan said this sort of case would undoubtedly appear more frequently in the courts and indicated why insurers should consider global warming in their assessment of risk.

"Professional liability claims could arise from, say, when architects fail to factor in climate change, and the impact of storm surge and rising sea levels, in coastal development," Mr. Logan said.

"In D&O (directors and officers) lines, there could also be claims related to risk management. after all, Goldman Sachs has said it's now a fiduciary duty for company boards to consider climate change."

He also quoted Warren Buffett, as having said in 2006: "We'd be out of our minds if we wrote weather insurance with the notion that global warming would have no impact at all."

Dr. Robert Muir-Wood, chief research officer of catastrophe modeller Risk Management Solutions, discussed the probability of a power station being by a homeowner whose property had been damaged by a hurricane.

He said it could take decades to prove linkages between greenhouse gas emissions and the altered occurrence of hurricanes. However he added: "When the sea level rise is the biggest cause of damage and loss of value, that is the area most hard-wired to climate change."

As rising sea level was the aspect of warming that most people can readily understand, then that would be the type of claim most likely to succeed in such a case, Dr. Muir-Wood added.

There was also the question of whether authorities could be sued for inadequate flood defences. The coastal flood zone had been extended further inland in the New Orleans area after Hurricane Katrina, as homes outside the former flood zone were inundated. "They extended it in Louisiana, but if they did that for the whole of the US, a lot of people in coastal areas in places like Florida would freak out, but really, FEMA should do it," Dr. Muir-Wood said.

Peter Dailey, director of atmospheric science for catastrophe modeller AIR Worldwide, told delegates it would be wrong to assume there would be more Atlantic hurricanes as the planet warmed.

Even though ocean temperatures would climb and therefore give more fuel to developing storms, it would also likely increase the frequency of the El Niño phenomenon.

El Niño starts with a warming of the temperatures in a specific area of the Pacific Ocean, off the coast of Peru. Through a complex chain reaction, it causes significant changes to global weather. These changes include a greater degree of wind shear over the Atlantic. As wind shear is a destructive factor in the formation of hurricanes, Mr. Dailey said this was a global-warming factor that would count against greater frequency of hurricanes.

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