Negotiations must begin again between government and industry over flood insurance – now is not the time for insurers to stay on the back foot

Brace yourself: flooding is set to return to the top of the agenda in a big way in 2013.

With the current agreement between the industry and the government over the provision of flood cover set to expire at the middle of that year, the countdown to find a replacement begins now.

It’s going to be a fight - and it’s going to get ugly.

Given the recent battering the insurance market has taken in the public view over referral fees, this is the last thing it needs. Already the consumer media is gearing up, with scare stories about flood insurance no longer being available, or affordable, and with some flood victims that have been let down by the industry coming forward to tell their tales.

Congratulations then to Marsh for coming up with a potential solution, as deputy editor David Blackman reports this week. The industry is all too prone to keeping on the back foot in these situations, complaining and lobbying but rarely seizing the initiative. In proposing a pool system, which it will manage and source reinsurance for, Marsh has come up with a smart and workable option.

There are many details to iron out, however, and the success of the initiative will depend entirely on the level of insurer support. Marsh has so far declined to name its supporters.

The initiative, dubbed Project Noah, should also not be seen as a get-out clause for the government. Ministers have a responsibility to the public to lead on this issue, and the chances are that the government will become the insurer of last resort, in some shape or form.

Negotiations between industry and the government began last week. Over the next few weeks, ministers must remember that they have the vital responsibility of dragging this country’s flood defences into the 21st century. Without this, nothing is possible.