The physical shocks caused by climate breakdown will hit global economic growth by a third, according to a risk assessment by a network of central banks.

The rise in the estimated hit to the world’s economies as a result of the shocks from flooding, droughts, temperature rises, and mitigating and adapting to extreme weather was the result of new climate modelling published this year.

The Network for Greening the Financial System, a membership body of global banks and financial organisations, said in a report this week that the huge increase in the risk from physical shocks to the economy marked a considerable change in the overall severity of the damage caused.

The report was published as the business losses alone from the devastating floods in Valencia, which killed more than 200 people, were calculated at well over €10bn (£8.3bn).

“This new study is based on the most recent climate and economic datasets,” the report said. “They offer highly granular and robust data with excellent geographic and temporal coverage. With the consequences of climate change gradually becoming more apparent, adding the most recent data makes our estimates much more robust.”

Despite the increase in risk to global economies, some experts say the analysis is a huge understatement of the impact climate breakdown will wreak on economic growth.

Sandy Trust, an actuary who works on sustainability and the climate crisis, said the small print in the report by the network of central banks revealed they had failed to take in to account the impact of climate tipping points, sea temperature rises, migration and conflict as a result of global heating, human health impacts or biodiversity loss. Climate tipping points, for example the melting of the Greenland ice sheet, and the deforestation of the Amazon, are critical thresholds that, if crossed, will lead to huge, accelerating and sometimes irreversible changes in the climate system.

Trust said: “This is a massive one-third hit from physical damage on GDP. It has increased more than five times, from about 6% to 33%.

“But while this is a much more severe damage risk, it is by no means comprehensive. The analogy I would use is a model of the Titanic where you can see the iceberg, but the modelling fails to recognise that there are not enough lifeboats on board, or that the cold water is a threat to human life. So this report is still systemically underestimating the risk.”

The NGFS is a group of global banks that provide environmental and climate risk modelling in the financial sector. Its update on climate risks using the new methodology foresees more than 30% losses due to the climate crisis by 2100 from a 3C rise in global average surface temperatures. The report said: “The new damage function does a much better job than its predecessor at representing the physical risks posed by climate change.”

This is a vast difference compared with previously used economic predictions that damages from global heating would be as low as 2% of global economic production for a 3C rise in global average surface temperature.

Yet the group warned that the future economic outlook may be significantly worse. “It cannot be excluded that the economic effects of climate change might turn out to be even more severe than visualised under the NGFS scenarios, for instance, if certain tipping points are reached,” the report said.

“Thus, users should also take into account the tail risks of climate change, along with other risks such as nature-related ones, which are not necessarily captured by these scenarios.”

Trust wrote a report last year with the University of Exeter, which said widely available climate crisis scenarios systematically underestimated the risks, and he said underestimating the impact of global heating was “extremely dangerous”.