Chief executive Maso says industry losses will be at least double the £100m estimated by the ABI
AXA faces up to £60m in claims from the floods in Cockermouth and other extreme weather events in November.
AXA insurance chief executive Philippe Maso admitted that the insurer had “taken a disproportionate share of the bill” from the Cumbrian floods, because it has a large footprint in the area for historical reasons.
He added that the ABI’s estimate of £100m of losses arising from weather events in November seemed far too low, and he thought the industry total was more likely to be in the region of £200m-£250m.
Maso said: “These are exceptional events, and it just happens that we have a large exposure in Cumbria. In other parts of the country, it would be another insurer. These flooding events are localised and random. It doesn’t mean anything in terms of where you are and where you are going as an organisation.”
Maso, who visited Cockermouth after the floods and recently met with MPs to discuss the response to flooding, said AXA had responded well. He said: “At the end of a very difficult year, all the teams were mobilised quickly to support the areas – this was the most important thing.”
He added that flood risk was 100% privatised in this country, which is unusual compared to the rest of Europe and the USA.
Asked if he thought the UK should introduce a state fund to compensate flood victims, he said: “I have suggested many times that we should think about it, but people say that if you have a state system, individuals are no longer incentivised to manage flood risk themselves.
“So, for example, people could construct buildings without regard to flood risk, so the planning laws have to become more draconian. It would create a centralistic, Big Brother system.”
Maso is a key supporter of the proposed Flood and Water Management Bill, which aims to strengthen procedures for monitoring flood risk as well as dealing with the aftermath of a flood.
Speaking in this week’s Insurance Times, he said: “I think the Flood Bill can deliver this, but I am worried that – with the next general election only a few months away – we may run out of time. In my view, it is an imperative that the Flood Bill becomes a priority for this parliamentary term.”