"Governments now have a chance to make rational choices for the future, before it is too late," ABI's director of general insurance, Nick Starling, is set to tell a conference on Wednesday.

ABI members provide around 94 percent of Britain's domestic insurance market and hold 20 percent of the investments on the London stock market.

Damage costs from the three most expensive types of storms -- hurricanes in the United States, typhoons in Japan and windstorms in Europe -- will rise to $27 billion in an average year by 2080 up from $16 billion today if carbon dioxide emissions double their current rate, ABI's report said.

"Insurance acts as a messenger for the financial costs of climate change. Insurance is all about risk and assessing risk," ABI policy adviser, Sebastian Catovsky said.

The increasing cost of storm damage will have to be found in the international money markets, pushing up the cost of borrowing as demand grows, Catovsky said.

"This will have a knock-on effect both to capital markets and financial markets overall," he said.

Britain's prime minister, Tony Blair, who is hosting the Group of Eight summit, hopes to push through radical plans to combat global warming, but US President George Bush opposes mandatory measures to cut emissions as too costly for industry.

The other members of the G8 are Canada, France, Germany, Italy, Japan and Russia.

But ABI said the final bill could be even higher as its estimates do not include population and infrastructure growth, damage to which would increase costs.

Two-thirds of the cost is covered by the insurance industry and it also needs to prepare for years when a flurry of storms combine to batter the globe.

"The important point is that that it won't even out every year," Catovsky said.