"There are cities around the world where floods have become frequent and companies cannot insure at premiums that are acceptable to the client."

Natural disasters cost the world more than $60 billion in 2003, a quarter of which was insured, according to "snapshot" findings from Munich Re. Both figures are up from 2002, when global losses were $55 billion and insured losses $11 billion.

Insurers have responded by trying to raise prices and policy excesses, though competition and political pressure have sometimes limited their ability to do so.

In the end, though, they will have little choice, he said.

"If losses go up, then premiums will go up," he said. "Climate change will aggravate the risk situation."

Loster, who also heads a climate change working group of the U.N. Environment Programme Finance Initiative, said losses in 2003 - more than $10 billion of which was caused by a European drought - fell short of a record of about $100 billion in 1999.

The study was presented on the sidelines of 180-country United Nations talks in Milan on the Kyoto Protocol - a pact to limit emissions of gases believed to cause global warming.

The treaty may never take effect as the world's biggest polluter, the United States, has rejected it and Russia is threatening not to ratify.

The Munich Re study found an inexorable increase over the last 40 years in devastating events with links to global warming which are taking an increasing economic toll.

"We will have to get used to the fact that extreme summers, like the one we had in Europe this year, are to be expected more frequently in the future and that they will become more or less the norm by the middle of the century," Loster said.

He said insured losses had increased by a factor of 10 in four decades, outpacing a six-fold rise in overall economic losses as more and more people bought insurance.

Lifestyles have also played a role as people in wealthier countries have tended to build more valuable houses and migrated toward coastal areas like Florida in the United States which are more subject to flooding.