Potential inland flooding losses could be significantly greater than actuaries currently estimate, according to research from the Association of British Insurers (ABI).
Its report, Inland Flooding Risk – Issues Facing the Insurance Industry, estimated that up to 1.2 million properties in the UK are at risk of inland flooding. The total insured value of property at risk is put at £35bn.
Factors such as climate change and increased building development in or near flood plains were found to have increased the risk of properties suffering flood damage.
The report calls for effective control and co-ordination of the planning process to reduce the scope for property development on unsuitable land.
It also recommends encouraging suitable drainage methods and buildings designed with the flood risk in mind.
Mary Francis, the ABI's director-general, said: “The insurance industry recognises that natural perils, such as flooding, are becoming a more costly problem.
“Of particular concern is the need to identify sufficient land to support the government's target of building three million new homes by 2016.”
Brian Utteridge, head of flood defence at the environment agency, which has been working with the ABI, said: “This partnership has given us a good insight into the insurance considerations of flood.”
The report makes a number of recommendations, including targeting inland areas for flood defence improvement and greater liaison between researchers in the field of climatic risk.
