ABI pours cold water over Marsh flood project

The ABI has refused to support Marsh’s Project Noah flood insurance initiative, claiming it will not fulfil its aims of maintaining affordable flood cover.

Project Noah, proposed by Marsh, envisages UK insurers pooling their flood risks and ceding the bulk of of them to global reinsurers.

The proposal aims to succeed the current statement of principles agreement between the ABI and the government, which expires in June 2013 and ensures availability of flood protection.

The ABI’s Assistant Director of Property, James Dalton, said: “Both the insurance industry and the Government want to see a model put in place that is affordable and sustainable in the long term. Project Noah does not address these key issues as it would not ensure affordable cover for customers; would require extensive Government support; and is reliant on the international reinsurance market being able to accommodate it. It is therefore not supported by the ABI’s members.”

“Project Noah will not deliver affordable flood insurance for 200,000 at risk properties which will require cover when the current arrangements end in June 2013,” he added.

Dalton added that the ABI is developing its own proposal, which he claimed is “in constructive partnership with the Government” and which “aims to provide universal and affordable flood insurance for all our industry’s customers in a way that will provide a long term solution to this key challenge for the country”.

The statement comes after Biba announced its support for the scheme, as reported by Insurance Times yesterday.