Thomas BUBERL, the head of global insurer AXA said on a panel at the World Economic Forum's annual meeting in Davos, Switzerland, that climate change had become a reality for the insurance industry.

Practically, the extreme weather events can increase the insurance companies' claims with the possibility that certain risks are considered too risky to be insured in some regions of the world.

If global temperatures continue to rise, bringing more hazards like hurricanes, droughts and wildfires, insurance companies may not be able to offer cover, said Thomas BUBERL quoted by Thomson Reuters Foundation.

As a consequence Thomas BUBERL announced that AXA would no longer insure coal projects and was also divesting from coal.

"Insurance companies have a vested interest in switching their money away from fossil fuels".

At the same time, Thomas BUBERL said the negative effects of climate change on AXA's claims outweigh the returns from investing in coal.

"In my case it's pretty simple - I have a good return potentially from investing in coal; I have lots of claims (as a result of) all these consequences".

Investing less in coal "pays out significantly" in cutting the number of claims and in being able to continue providing insurance, he added.