Claims Clinic: 'Millions rely on us for financial protection'

The need to develop long-term solutions to flood risk management in the UK is a matter of urgency, the ABI has warned.

Speaking at the recent Insurance Times claims clinic at the Don Restaurant in London, ABI director of general insurance and health Nick Starling said flooding is now the biggest catastrophic risk facing the UK.

The expiration of the Statement of Principles in 2013 – the protocol by which insurers continue to provide cover in high-risk areas – means the race is on to find an alternative solution to flood risk.

Starling said: “We are approaching a crucial time for flood management across Britain – reduced future central government investment in flood management, and the ending in June 2013 of the Statement of Principles make it imperative we develop long-term solutions to manage the rising flood risk effectively. At stake is not only the safety of our flood-vulnerable communities, but the continued widespread availability of competitively priced flood insurance.”

He said that insurers were disappointed in the 8% cut in the flood defence budget and wanted to see that funds available were used in the best possible way. “From the government, we need to see that investment is being targeted to areas of greatest need to maximum affect. We must see results on the ground. And we need details of how the government’s vision for greater local community involvement in managing flood risk will actually work,” he said.

More communication needed

Starling warned that the government’s policy of localism should not lead to disjointed flood management and added that when a flood occurs, the range of insurers, brokers, claims managers and loss adjusters need to communicate more to facilitate and co-ordinate recovery efforts.

Insurers and the government were determined to ensure that flood protection cover remained available, said Starling. “The UK is one of the few countries where flood insurance is an integral part of property insurance. We want it to stay that way.”

The Environment Agency’s head of investment and funding for flood risk management Aidan Kerr also spoke of the need for cross-sector data sharing. “Water com­panies, local authorities and insurance firms themselves will be developing their understanding of flood risk all the time, and may also have key data relating to the risk of flooding from all sources – and finding a way for all organisations to share this data more openly would clearly have benefits,” he said.