Insurers could help to combat global warming by penalising those who abuse the environment through higher pricing, according to a panel of industry leaders.

But their efforts would stop short of denying cover to the worst offenders because there would always be insurers who would come in and fill the gap.

In a discussion involving CEOs of some of the world's biggest industry players at the Bermuda-organised World Insurance Forum (WIF) in Dubai, it was clear that all believed the situation was urgent and the industry has a role to play in protecting the environment.

Lord Peter Levene, CEO of Lloyd's of London, who has repeatedly described global warming as the biggest issue facing the insurance industry, spelled out the urgency of the situation.

"We have left it too late already and we have to do what we can," Lord Levene said. "When things go wrong, we will have to pick up the pieces.

"Who picked up the pieces after Katrina? And after 9/11? We have much more skin in the game than anybody else. We are not talking about these things to be pious, but because these things need to be done.

"Pricing is our only weapon. Through pricing we can reward people who are doing things responsibly and penalise those who are not.

"It needs a superhuman effort from the industry, which could be jeopardised by those who view it opportunistically as an way of making a quick profit."

Fellow panellist Brian O'Hara, the outgoing CEO of XL Capital, agreed that an industry-wide boycott of insurance cover for environmental abusers was unlikely to hold.

And Mr. O'Hara said much of the global warming activity was happening in developing countries.

"A lot of the problems are happening in the emerging markets," he said.

"They all have their own insurance industries that are going to go their own way. We are a fragmented industry. We don't have the homogeny that the banking industry has."

Swiss Re CEO Jacques Aigrain reiterated the problem."In terms of not offering coverage to anybody who's not engaged in sustainable activities, the only way to hit the uncompliant firm is for no one to offer coverage," Mr. Aigrain said.

"What would happen is that some part of the industry would be willing, but others would think that's a nice place to play and a chance to make money."

Martin Sullivan, CEO of American International Group, which employs about 200 people in Bermuda, said his company was actively seeking ways to reduce its environmental impact.

"We believe there is a major role for us to play," Mr. Sullivan said. "The new buildings we are constructing, we are doing it in a way that is 'green'. We also have green ambassadors to see how we can reduce our footprint."

When it came to cutting insured losses from the more intense storms that might take place as a result of global warming, again the CEOs considered pricing the main tool.

"We talk about the spread of development and housing to coastal areas," Lord Levene said. "Is that the worst possible place to go? Yes.

"What we can do is to have a pricing structure to discourage people from going there.

"But then we get criticised by legislatures, particularly in the US, who ask why it should cost more to insure your home there. Then they subsidise the cost of home insurance and it does not help to deal with the problem."

The cost of insuring buildings that were not constructed to the highest windstorm- or earthquake-resistant standards should be higher than for those that were not.

"We want to encourage people to develop in a way which is responsible," Lord Levene added.

Mr. O'Hara believed that an emerging risk was emanating from the emerging economies of Asia.

"The growth in the emerging world is staggering," Mr. O'Hara said. "I'm an avid watcher of the Weather Channel and recently I saw there was a huge typhoon that came in just south of Shanghai.

"There has been huge development there and I don't know where those risks are going. I guess a lot is being ceded to the reinsurance market. This could be a surprise to the industry going forward.

"For us, when you're looking at something over here, something over there usually gets you."