ABI's flooding conference critical of government flood defence cuts
Figures published by the ABI have shown the cost of flood damage in the UK since 2000 has leapt by 200% on the previous decade.
According to the ABI, one in six homes in England is currently at risk of flooding. Nearly 500,000 people face a significant flood risk, and it has been estimated that this could rise to 840,000 by 2035 without adequate investment in flood defences.
ABI’s figures highlight the huge financial cost of flooding:
• Since 2000 insurers have paid out £4.5bn to customers whose homes or businesses have been hit by flooding. This is up 200% on the £1.5bn paid in the previous decade in real terms.
• Major floods since 2000 have included the 2007 summer flooding which resulted in insurers paying out £3bn, the 2005 floods in Carlisle that cost £272m, and the Cumbrian floods in November 2009 costing £174m.
• Reasons for the rise in flood costs include the increased frequency and severity of flooding in the UK and the growing problem of surface water flooding (the Environment Agency has estimated that 2.8m properties are at risk of flooding from surface water). It has been previously estimated that the total value of assets under flood risk exceeds £200bn – more than the current budget deficit.
Speaking at the ABI’s “Fighting Flood Risk Together” conference, Tim Breedon, ABI chairman and group chief executive, Legal and General, said: “ Insurers play a key role in helping those affected recover, but prevention must be better than cure. The recent announcement of a cut in Government investment in flood defences was disappointing, and it is now vital that Government spends its money wisely to bring real improvements where they are most needed.”
Barry Smith, chairman of ABI’s Property Committee and chief executive of Ageas UK, said: “Millions of customers rely on the financial protection provided by flood insurance, and insurers are determined to do everything possible to ensure this continues.
"The insurance industry’s flood insurance agreement with the Government, under which insurers commit to offering flood cover to existing customers, expires at the end of June 2013. To ensure flood insurance continues to remain widely available and competitively priced, further investment in flood management is needed when the public purse is in better shape," Smith added.