Industry is “keeping its side of the bargain” says ABI chief
The ABI has launched a counter-attack on former Home Secretary David Blunkett, claiming that the insurance industry’s response to this summer’s floods was “excellent”, and that it was “keeping its side of the bargain” with government.
ABI director general Stephen Haddrill has written to Blunkett, in response to criticisms the MP for Sheffield Brightside made in an interview with Insurance Times.
The letter said: “The insurance industry has dealt with 130,000 claims at a cost of some £3bn – the largest insured event in the UK by some margin. Dealing with this is a massive exercise. Flood damage inevitably takes money and months to put right, and this is compounded by the sheer volume of claims and the pressure on people, supplies and equipment.
“The government has so far paid £57m. We are emphatically keeping to our side of the bargain.”
Haddrill went on to say that the ABI’s continued partnership with government “requires a step change in the government’s approach, including a long-term strategic approach to issues of flood defence spending, drainage, planning and resilience. If this does not happen, then it will be increasingly difficult for our members to offer insurance in high risk areas.”
He added that the ABI could not compel its members to continue to offer cover in flood-affected areas, because “to do so would be directly contrary to competition law”.
Last week, Blunkett said he was “very disappointed” with the industry’s response to the floods, which hit his constituency, and lambasted moves to raise premiums or withdraw cover altogether from flood hit areas.
He said: “The whole business of insurance is about sharing risk. Doubling premiums or even withdrawing the preparedness to cover that risk, I don’t think puts the industry in a very good light.”