Biba's Foulsham believes spending cuts will prevent government support of the fund
The ABI is investigating a pooled fund for properties in high flood risk areas. As the industry gears up for today’s flood summit with the government, Insurance Times has learned that the ABI has commissioned wide-ranging research into future options for insuring areas at risk of inundation.
Under the ‘statement of principles’ agreement between the government and the ABI, the latter has said that insurers will provide flood cover as part of standard household and business products, but only until 2013.
Among a number of options, the study will investigate the establishment of a pooled risk fund for households and businesses unable to obtain cover because the risk of flooding is too high.
But Biba technical services manager Steve Foulsham expressed scepticism that the government would back a pooled fund, given public spending constraints.
Insurance Times has also learned that Fortis UK chief executive Barry Smith has taken the chairmanship of the ABI’s new flooding working party. Smith urged the government to prioritise flood defence investment in next month’s comprehensive spending review.
He said: “Everybody understands that the public purse strings are tight, but continued investment in flood defences must be a priority in the upcoming government spending review if we are to avoid parts of the UK becoming uninsurable.”