In the first of a new series of regional broker profiles, Andy Cook talks to Ted York, managing director of Lewes broker Berkeley Alexander
On 11 October 2000, Lewes in East Sussex received a month's rainfall in one day. More than 400 homes were flooded, including 16 listed buildings and 200 businesses. Lewes was suddenly on the front page of every newspaper and became a totem for the industry's battle with government over flooding.
The economic impact of the flood was severe. Lewes ground to a halt and, while the council diligently supplied sandbags and emergency assistance, it was brokers like Ted York, managing director of the town's biggest broker Berkeley Alexander, who helped people get their lives and businesses back.
Not surprisingly York has strong views on the issue of who picks up the flooding bill. "The government has a great responsibility. It makes the rules on planning and, if something like this happens, maybe it shouldn't have given planning consent."
Flood defences
York is concerned that flooding is slipping down the agenda of the government's spending priorities, but is hopeful that some kind of shared responsibility with insurers can be worked out for severe flooding.
"If we managed to bring in terrorism cover on a pooled system, where the government picked up the liability only after a certain limit, then we have to put in place measures to do this now," says York.
"These pools build up before claims are made and maybe some of the money can be used to build better flood defences.
"It is not fair or proper that people's homes, and indeed their lives, are blighted by the flooding issue," he adds. York explains that house prices in some areas of the town have fallen by 10% to 25%. One of the key reasons is that buyers are concerned that they will not be able to buy insurance for the houses in future.
Insurers have threatened to withdraw cover from areas like Lewes by the end of the year, if they do not receive government pledges of vastly increased flood defence spending.
Part of Berkeley Alexander's portfolio is a domestic scheme distributed through estate agents and underwritten by Groupama and Hiscox. So far, says York, the insurers have stood by their word and are renewing policies, but getting quotes from alternative sources is almost impossible.
Industry ultimatum
York is careful not to criticise insurers over flooding. He says he turned down an interview with BBC television because he was worried that it would show him criticising insurers.
"I had to be careful. I'm not going to slag off insurance companies because, by and large, it's not fair."
With the insurance industry's ultimatum on flooding rapidly approaching, York is worried. "If it doesn't get resolved, rates will rocket and excesses will start to mirror those applied for subsidence. In effect, householders will be self-insurers," he says
The impending regulation of general insurance brokers by the Financial Services Authority (FSA) is a concern for York. Berkeley Alexander is an independent financial adviser, as well as being a broker, so York has already gone through the pain of statutory regulation.
"I think one of the most difficult areas will be training and competence. People who are in the last quarter of their career are suddenly faced with exams. And that's no fun. You haven't taken an exam for 30-odd years and you lose the ability to do them.
"When I was taking my financial services exams I had to sit right at the front of the exam room to make sure I didn't lose my train of thought. If I sat at the back, somebody moving a ruler would take my train of thought away," admits York who is 55.
York is also concerned to make sure the regulations are proportionate. " A firm's requirements to train employees is to the extent of the employee's exposure to particular products. I mean, you don't have to be ACII to talk to a customer about a motor policy," he says.
