Insurance industry backs calls for enhanced flood infrastructure programme

Insurers have welcomed a new report which urges the UK government to undertake a £12bn investment in sustainable drainage systems to save over half a million homes and businesses from the risk of flooding.

Executive agency the National Infrastructure Commission (NIC) issued its new report on 29 November 2022, entitled Reducing the risk of surface water flooding.

This called for stricter controls on new property developments, alongside up to £12bn of investment in drainage infrastructure over the next 30 years. Reinsurance scheme Flood Re told Insurance Times that this £12bn figure is “reasonable” considering the threat that flooding poses to the UK economy.

Localised floods across England last month, as well as a series of major flooding incidents in London in 2021 – which affected 1,500 properties and disrupted healthcare and transport networks – have highlighted the risks posed by surface water flooding, according to the NIC’s report.

Surface water flooding occurs when rainwater does not drain away sufficiently through the normal drainage systems or soak into the ground, but instead lies on or flows over the ground instead.

The NIC’s document added that at present, 325,000 English properties are currently in areas at high risk from this type of flooding, which means they have a 60% chance of being flooded in the next 30 years.

However, a combination of the impacts arising from extreme weather caused by climate change and increasing pressure on existing drainage systems caused by new developments could push an additional 230,000 properties into this high risk category by 2055, the NIC explained.

The spread of impermeable surfaces – such as gardens being paved over – could mean another 65,000 properties in the UK are at high risk of surface water flooding.

Professor Jim Hall, commissioner at the NIC, said: “It’s clear that faced with more intense rainfall and increased urbanisation, we need to start taking this type of flooding far more seriously.

“The solution is clear – reducing the amount of water flowing into drains, [while] also improving the capacity of those drains.

“That means stopping urban creep from increasing the amount of storm water that drainage systems have to cope with and giving nature more opportunities to hold on to excess water, as well as targeted investment to ensure sewers can cope with growing pressures.

“While sustained investment is needed, the estimated additional costs are relatively modest. At least as important is a more joined up approach to owning and acting on the problem.”

A ‘timely call to action’

The NIC’s report explained that the first step in tackling rising surface water flooding is to stop adding to the problem by limiting the knock-on effects of urban spread on existing drainage systems.

Further action to expand existing drainage capacity above and below ground - including the use of nature-based solutions, such as green gullies and flood storage ponds - and addressing the fragmented way in which the problem is currently managed and funded will improve the resilience of drainage systems against more frequent and heavier downpours.

Jim Clark, Zurich’s public affairs manager, said the report could not have been better timed.

“Our changing climate means that we’re likely to see warmer, drier summers and warmer wetter winters, so we need to adapt to the rising risk of surface water flooding,” he explained.

“Zurich’s own research [suggests that] 42% of commercial buildings in London alone are at risk of surface water flooding.

“With Flood Re due to cease providing cover for high flood risk properties in 2039, the National Infrastructure Commission report provides a timely call to action for government.

“We need to strengthen planning guidance and building regulations to make sure we’re not building more homes on flood plains.

“The government should improve the sharing of national and local flood risk assessments to help communities better understand their flood risks, improve their resilience and plan for emergencies. The government should also increase funding for resilience measures by making flood grants accessible to households all year, rather than just after a significant flood event.

“While insurance can provide some financial resilience to flooding, we know that victims of flooding also face mental anguish from the disruption and loss, which is why we provide free counselling services to affected customers.”

Encouraging ‘tangible steps’

Responding to the NIC report and its recommendations, a Flood Re spokesperson added: “We are very pleased to see the issue of surface water and the devastating impact it can have on homes and businesses being considered by the NIC.

“As an inherently uncertain and difficult to predict issue, it can be difficult to provide a thorough assessment of how to tackle surface water. The work by the NIC provides a quantified and reasonable figure, allowing tangible steps to be taken in a cost effective way and - for the first time - considers how the Treasury considers investment processes for capital spending.

“Flood Re is supportive of the findings of the report - in particular [recommendations around] the deployment of sustainable [drainage] systems (SuDS) as a cost effective way of reducing potential damage after flooding.”

The spokesperson noted that SuDS “can also be supplemented by [the] pragmatic and cost effective deployment of property flood resilience (PFR), supported by Build Back Better”.

Build Back Better is a Flood Re initiative that launched in April 2022. It offers homeowners the chance to install PFR measures up to the value of £10,000 when repairing their properties after experiencing flood damage.

This is to ensure that when flooding next strikes, properties are better prepared and more water is kept out of the home, preventing a repetition of severe damage.

The spokesperson continued: “This groundbreaking programme, now backed by 60% of the UK’s residential property insurance market, allows customers to access up to £10,000 to install PFR and ultimately reduce the impact of future flooding, enabling people to return to their homes much faster and have peace of mind.

“Additionally, we support measures to encourage water companies to work with local authorities to bring forward efficiencies in the planning system and [demonstrate] a better understanding of surface water risk, which we would like to see developed through the Levelling Up and Regeneration Bill.”

This bill was initially introduced into Parliament in May 2022.

Broker support

Meanwhile, Biba’s executive director, Graeme Trudgill, said the trade association’s members were well aware of the issues around surface water flooding. He hoped the government would therefore take the report’s recommendations to heart.

He told Insurance Times: “Some of our members are reporting [that] 70% of their flood claims are caused by surface water flooding, so this is an important issue and we welcome the NIC report.

“Surface water mapping is a point raised in the current Biba manifesto and the NIC is recommending that there is more granular street modelling of flood exposure - we support this proposal.

“The NIC’s report also raises some important concerns about the potential increase in the number of properties at risk of flood unless action is taken.

“Our current manifesto makes the [same] point regarding stricter controls on new property developments and we were pleased that the secretary of state produced the new stricter guidelines on planning [in October 2022] – however, what remains to be seen is if there will be sufficient enforcement on developers.”

Trudgill added that Biba also supported the NIC’s “interesting point” around “the Environment Agency, local authorities and water companies [needing] to work together on a plan to improve drainage systems”.

He continued: “We support the proposal to make SuDS a legal requirement in England as it is in Wales.

“Ultimately, we want [the] government to implement these areas in the report.”