Zurich: Lessons from Storm Desmond

Insurers need better risk awareness and communication, schemes to protect entire areas and alternatives to sand bags, according to a new report from Zurich. 

The report reviewed the risk management processes around Storm Desmond.

Zurich head of general insurance Conor Brennan also said that new development on flood plains should be forbidden and that there should be initiatives for insurers to cope with the costs of severe weather events.

Brennan said: “At Zurich we recognise that it must be feasible within current legislation and practice, to forbid new development on flood plains. A financial incentive is surely needed to increase the uptake / motivation to reinstate in a more resilient way.

“This could be a tax incentive, an allowance, a coordinated approach by the insurance industry, or other instruments to alleviate the upfront cost of the investment.”

The report is the latest in a series of post event review capability (PERC) reports where Zurich reviews large flood events.

Storm Desmond caused severe flooding across Cumbria and the north of England in December 2015.

It claimed at least three lives and flooded nearly 19,000 homes.

Brennan said: “A risk can rarely be reduced to zero so when an insurer’s involvement in a flood solution is put to the test in the ‘real world’ they will discover things that could have been done differently – sometimes even better.

“The immediate priority for an insurer is always to ensure that the communities and businesses affected understand and protect themselves as best as possible - pre-event risk reduction is key.

“If we understand the threats associated with a potential loss and critically, we are ready and able to accept these consequences should an event exceed these protection standards the recovery can be that less painful.”