The speed at which oceans are warming could see parts of the world become uninsurable if climate change is not checked, warned the Geneva Association, a global insurance think-tank, adding that governments need to invest more in flood defences and tighten building restrictions in risky locations to mitigate the fallout from extreme weather hazards.

The speed at which the oceans are warming is threatening insurers' ability to sell affordable policies in a growing number of places around the world, forcing insurers to change their assessment criteria for the risk of natural disasters hitting a specific area, said the Geneva Association on Monday.

"Traditional approaches, which are solely based on analysing historical data, increasingly fail to estimate today's hazard probabilities," said the industry group in a report.

"A paradigm shift from historic to predictive risk assessment methods is necessary," it stressed, adding that the insurance industry needed to support scientific research to gain a better understanding of when and where weather-related disasters will hit.

Citing losses from last year's Superstorm Sandy, which struck particularly hard in New York and New Jersey and cost the U.S. economy about $65 billion in losses, the group said overall global property insurance premiums have remained broadly stable outside loss-hit areas because price have been kept artificially depressed due to capital inflows to the sector in the wake of historic low interest rates.

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However, the study, headed by Falk Niehorster of the Risk Prediction Initiative of the Bermuda Institute of Ocean Science, also acknowledged that the main driver of rising insurance costs was linked to socio-economic factors, such as a growing number homes for the wealthy built in coastal areas and flood plains.

Urging governments to boost investment in weather protection, the Geneva Association's chief John Fitzpatrick pointed out that the warming of the world's oceans and rising sea levels are key drivers of extreme weather events:

Given that energy from the ocean is a key driver of extreme events, ocean warming has effectively caused a shift towards a 'new normal' for a number of insurance relevant hazards. This shift is quasi irreversible - even if greenhouse gas (GHG) emissions completely stop tomorrow, oceanic temperatures will continue to rise.

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The average global sea level has risen by nearly 20cm over the past century, but faster rises have been recorded in more recent years. According to the UN's most recent report on climate change, sea levels rose at an average rate of 1.8mm per year from 1961 to 2003, and by 3.1mm from 1993 to 2003, though it was unclear if this reflected a longer-term trend.

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