AXA calls for Flood Re scope extension amid welcoming flood strategy

AXA UK has called for the extension of Flood Re’s scope as it welcomed the Environment Agency’s (EA) draft strategy on flood and coastal erosion risk management for England.

It has argued that by extending Flood Re’s remit to include additional expenditure beyond cost-neutral flood resilient repairs might bring about improved standards. Flood Re will run until 2039 only.

It has also called on the government to consider whether the current post-flood event grant scheme could be modified to provide pro-active funding of cost, plus resilient repairs before a flood event occurs.

However, for some of the EA’s strategic objectives, AXA believes the timeframe of 30 years is too long and that it is not ’sufficiently focused’ considering the action needed, and the rate of flooding and coastal change that is predicted to rise over the next decade.

It said that ’significant investment’ is needed and has requested further guidance regarding sources of investment and resources that will be able to fulfil the EA’s objectives.

It has urged the government to provide assurance on whether there will be negative impacts from Brexit on meeting this strategic objective for investment.

Role to play

AXA warned that insurers have a role to play in mitigating the impact of flooding in the UK as well as working with the Environment Agency.

The Environment Agency ran a consultation ran for eight weeks from 9 May to 4 July to gather views from people, businesses and partners on its draft strategy which aims to create national resilience to flooding by 2100.

It aims to publish the final strategy in 2020 and the initiative is a key commitment outlined in the government’s 25-year environment plan.

It follows the ABI’s research in June which found that the average cost of inland flooding is three times more without defences.

A spokesperson for the ABI, said: “Climate change is dramatically increasing the risk of flooding in the UK and there are potentially drastic consequences for homes, businesses and communities if we fail to take action. We agree that there needs to be an overarching strategy that combines both long-term ambitions and shorter-term practical steps for a resilient future.”

Shared goals and plans

Andy Bord, chief executive at Flood Re said he also welcomed the new longer-term strategy ”which aligns with our own long-term goals and plans”.

”The £1bn a year of investment is essential. The strategy’s recognition of the vital importance of flood resistance and resilience for the UK’s housing stock – to reduce both the overall number of homes flooded and the damage where flooding does occur – echoes a key aspect of our own Transition Plan,” he added.

“Flood Re is here to ensure that those in high flood risk areas can get home insurance, and has so far helped more than 200,000 households get affordable insurance.

“Flood Re will continue to work with the insurance industry and government to ensure that those living in high flood risk areas can access affordable and available insurance as the threat of flooding grows”.

Further recommendations

Although AXA said that a significant barrier exists which is educating property owners on the benefits of investment in flood resilient and resilience measures.

Agreeing with the EA’s intentions believing that having a strategy in place is a key part of mitigating the impact of the UK’s flooding.

It has suggested the following measures:

• Further clarity on which body will be responsible for construction of standards for flood and coastal resilience to ensure they are effective
• Building regulations need to be adapted to incorporate requirements for flood resistance and resilience in certain scenarios
• The scope of Flood Re could be extended to include additional expenditure beyond cost neutral flood resilient repairs that therefore could improve standards
• A limit could be put in place for additional expenditure
• Further analysis should be taken to identify if there is a suitable mechanism that could encourage the insurance industry to pay for additional expenditure beyond the cost of neutral repairs

It has urged for further action to stipulate that developers building in high-flood risk areas should include flood resilience for new builds.

Overall the insurance industry is supportive of effective resistance and resilience property-level protection measures that might help reduce the impact of flooding can have on a person’s property and possessions.