Climate change is a major concern on the minds of global insurance bosses, according to Axis Capital Holdings Ltd. chairman Michael Butt.

Many big insurance companies are working closely with scientists, as they try to arm themselves with as much knowledge as possible about the potential impact of changes in temperatures, sea level and weather patterns, he said.

"The subject of climate change and how we react to it in the insurance industry is very important — climate change is not going to go away," Mr. Butt said in an interview.

On March 16, Mr. Butt will moderate a World Insurance Forum panel on potential costs and opportunities from climate change. The Forum will take place at Tucker's Point Hotel and Spa.

Mr. Butt also co-chairs the Climate Change and its Economic Impact on Insurance (CC+I) Working Group of the Geneva Association, which is a group led by around 80 industry leaders, otherwise known as the International Association For the Study of Insurance Economics.

"At the moment, we broadly accept the findings of the Stern Report and the range of possibility of two to six degrees' warming," Mr. Butt said.

"We're not interested in challenging the science. You can jump up and down on that pinhead and not achieve anything.

"That range of temperature rise is likely and what's important is how you react and what you should do if you accept that range. That seems to us to be the most sensible approach for the industry to take."

Enhanced construction codes were one way in which climate change risks could be mitigated, he added.

The Stern Review is a UK-sponsored report on the economics of climate change.

Among the report's conclusions was: "Adaptation to climate change – that is, taking steps to build resilience and minimise costs – is essential.

"It is no longer possible to prevent the climate change that will take place over the next two to three decades, but it is still possible to protect our societies and economies from its impacts to some extent – for example, by providing better information, improved planning and more climate-resilient crops and infrastructure."

Scientists predict a rise in sea level and sea temperature, along with storms of increased intensity. This could mean more powerful hurricanes and stronger storm surges. Such a scenario would have a meaningful impact on Bermuda re/insurers, many of whom cover property and catastrophe risks.

Axis is not alone among Bermuda re/insurers with a serious concern over climate change. Tony Knapp, president and director of the Bermuda Institute for Ocean Sciences, who will also speak at the World Insurance Forum, is a director of Flagstone Re.

And Catlin Group has shown its concern about climate change by sponsoring a North Pole expedition, whose work includes monitoring the impact on the marine environment of rising carbon dioxide levels.

Mr. Butt also commented on conditions in the Bermuda re/insurance market and the outlook for this year after it recovered strongly last year from 2008's losses.

"The recapitalisation of the Bermuda market, broadly through the investment market recovery and through retained earnings, has put the Bermuda market in a strong position," Mr. Butt said.

"The market has shown it has discipline. Now it's going into a challenging period, where there is a lot of capacity and pricing, especially on the insurance side, is competitive, and profit margins will be reduced. Caution will be rewarded."