It said the number of winter storms crossing the UK had doubled in the last 50 years while summers were hotter.

Weather-related claims doubled to 6 billion pounds between 1998 and 2003 compared to the previous five years. The report said costs could triple again if no action is taken.

Swiss Re, the world's second largest reinsurer, has said the cost of natural disasters, aggravated by climate change, could double to $150 billion (82 billion pounds) annually in 10 years.

"Managing the impact of climate change is a major challenge for society -- we already live with its effects every day," said John Parker, head of general insurance at the ABI.

The government, which in 2002 ratified the Kyoto Protocol to cut greenhouse gas emissions, welcomed the report while acknowledging climate change was "unavoidable".

"Climate change is with us already and its impacts over the next few decades are now unavoidable," said Environment Minister Elliot Morley.

"In the UK we are likely to experience hotter, drier summers and warmer, wetter winters ... Our changing climate is bringing with it an increasing number of weather-related insurance claims," he added.

British spending on flood defences has jumped from 300 million pounds in 1996/7 to more than 400 million in 2004/5.

A spokesman for the Green Party gave a thumbs down to the government's environmental policies.

"They've got policies that go in completely the wrong direction ... They want to double or treble the size of the UK aviation industry and aviation is the fastest growing source of greenhouse gas emissions," said the Green's Spencer Fitzgibbon.

"They've worked very hard to give the impression they're tackling climate change but Kyoto's targets are completely inadequate," he added