"The loss and severity from extreme weather events has gone up incredibly over the past 10 years," says ratings expert
(For others news from Reuters Global Climate Change Summit, click on: http://www.reuters.com/summit/globalclimatechange14)
* Grid operators most exposed to weather event risks
* Energy firms most exposed to climate policy risk
* Emissions cuts could benefit automotive sector
By Nina Chestney
LONDON, Oct 13 (Reuters) - Many companies are "woefully unprepared" for extreme weather which causes hundreds of billions of dollars of losses a year, Standard & Poor's Ratings Services told the Reuters Global Climate Change Summit.
A U.N. panel of scientists has said it is at least 95 pct probable that manmade emissions are the main cause of rising temperatures since 1950 and predicts that the frequency of extreme heat waves, floods, storms and downpours will rise.
Global economic losses caused by extreme weather events have risen to nearly $200 billion a year over the past decade, a World Bank report said last year.
"The loss and severity from extreme weather events has gone up incredibly over the past 10 years to the point where some in the insurance industry think we are coming into an era of the new normal," Michael Wilkins, managing director of Infrastructure Finance Ratings at Standard & Poor's Ratings Services, said at the summit at the Reuters' London office.
"If that is extrapolated forward, even the reinsurance sector will possibly be under-capitalised to absorb the risk. But they are still in a better position than the corporate world which is woefully unprepared for climatic change," he said.
Power grid operators are the most exposed to risks from such events, Wilkins said.
In the United States in 2012, Hurricane Sandy tore down power lines and flooded electrical networks and left millions of homes and business without power. Some grid operators and power providers are trying to recoup their storm-related losses by raising tariffs.
"Any corporate which has manufacturing plants and equipment in exposed areas is vulnerable, especially those close to coastal areas where rising sea levels or storm surges could cause a dramatic impact," Wilkins said.
Companies, however, do not have to disclose the losses they incur from extreme weather events.
This has spurred Standard & Poor's Rating Services' involvement in an initiative launched at a United Nations' summit in New York in September.
The scheme will apply a stress test to assess the probable annual financial loss a company, region or city could expect once in a hundred years from climate risks.
S&P Ratings Services also looks at the impact of environmental regulation and climate policies on corporate credit ratings.
Energy companies which burn fossil fuels, such as coal, gas or oil, are the most exposed to risks in that area because they are required by government policies to reduce their greenhouse gas emissions, Wilkins said.
However, other sectors could reap the benefits of climate change. The trend towards lighter vehicles for increased fuel efficiency, smaller cars and electric cars could be advantageous for the automotive industry, for example.
"Companies like Toyota, who are making hybrids or electric cars and are able to raise finance to do so, will be able to benefit," Wilkins said.
"Auto-makers in the U.S., which have already suffered from the financial crisis, could be even worse off if they don't adapt very quickly to this."
(For other news from Reuters Global Climate Change Summit, click on http://www.reuters.com/summit/globalclimatechange14)
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(Additional reporting by Alister Doyle in Oslo; editing by David Clarke)
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