Eight months after the floods there's a whole lot of talking going on but not much action, says Sarah Kennedy
After months of ultimatums and tough talk following the summer’s deluge, the insurance industry is meeting with the government, to lay down the law….again, in yet another flood discussion.
Those who have followed the debate closely – should insurers continue offering cover in flood zones?; is the government doing enough in terms of flood defences and risk assessment?; how much money should the government be spending to mitigate future catastrophes? – will know this isn’t the first time the industry has met with the government and most certainly isn’t the first time the threat of removing cover has been issued.
The ABI is quick to point out that the latest meeting, held between insurers and Environment Minister Phil Woolas on Tuesday night, was more than a rubber-stamping activity. “We are going to play hard ball,” a spokesman insisted.
But we have been hearing that for months.
In June the ABI sent a letter to then Secretary of State for the Environment David Miliband urging the government to take action and increase its flood defence spending. In July, ABI’s Director General Stephen Haddrill met with the government to discuss the industry’s response to the floods but also to call for details about planned spending as well as addressing the much needed maintenance work on drainage. In August, the ABI issued a very harsh ultimatum to the government – meet insurers’ demands for increased defence spending and infrastructure and maintain their end of the bargain when it comes to the Statement of Principles, or risk the 500,000 homes in the flood risk zone losing cover.
And yet little to no action has been taken.
Even the interim report by independent reviewer Sir Michael Pitt, which called for urgent action by the government on flooding, has not inspired the much desired change, or even a promise of change.
And so the ABI is meeting with the government again, to bring forth their concerns and demands for better defences, again. And to hope, once again, their recommendations will turn into actions. Of course, the industry is in a precarious position.It’s clear insurers want to continue providing cover as laid out within the Statement of Principles – if the government holds up its end of the bargain. The industry is proud it is the only major insurance market where private capital stands behind flood coverage. And to withdraw that cover, especially from those who have already been victimized by last summer’s devastating floods, could create a massive public relations nightmare for insurers.
But one has to question the point of holding a series of additional review meetings over the next few months. Is it possible, that after all the previous discussions and media coverage that the government isn’t aware of what the ABI wants and what measures they are willing to take if those demands aren’t met? Unlikely.
Pitt’s final report is due for publication next summer. Again the shortfalls in flood defences, funding and risk management will be flagged. Again it will lend credence to the insurance industry’s list of demands from government. In the meantime we wait –and hope that when the Pitt review is finally released, it doesn’t result in another round of review “talks” that ultimately only delay actual change from taking place.
