Defra, UK - Flood Management - Insurance - = Joint ABI/Government Statement

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Flood = and Coastal=20 Erosion Risk Management

Insuran= ce

ABI/Government=20 Statement
Government=20 Commitments

ABI / GOVERNMENT = STATEMENT ON=20 FLOODING AND INSURANCE FOR ENGLAND

1. The Government and the Association of British Insurers (ABI) agree = on the=20 importance of managing the risk from flooding to people and = property. As=20 the floods of 2007 demonstrated, flooding can have devastating impacts: = it can=20 cause loss of life, displace thousands of people, and can cause major = economic=20 and social dislocation.

2. While flood defences, effective surface water management, flood = warnings=20 and other policies can reduce the risk from flooding, this risk can = never be=20 completely eliminated. In the UK, unlike in most other countries,=20 insurance against the impact of flooding has been a standard feature of=20 household and many small business insurance policies since the early=20 1960s. This enables households and small businesses to plan for = and=20 minimise the financial cost of flooding while insurers provide effective = and=20 efficient claims services and repair teams if flooding does = occur.

3. The ABI and the Government both want to ensure that the risk from = flooding=20 is managed effectively and that flood insurance remains as affordable = and widely=20 available as possible so that consumers and small businesses continue to = be able=20 to protect themselves from the financial cost of flooding. Since = 2000,=20 this has been achieved through a =91statement of principles on flood = insurance=92:=20 in the short term this commits insurers to continue to provide flood = insurance=20 under certain scenarios and the Government to manage the risk from=20 flooding. However, we recognise that the statement of principles = may=20 distort the market, hinder the development of specialist flood insurance = for the=20 more difficult cases and limit incentives for the uptake of = cost-effective=20 resilience measures to protect individual properties.

4.The ABI and the Government have agreed to work together to provide = a=20 long-term solution that will enable flood insurance to continue to be as = widely=20 available as possible without distorting the market. To achieve = this, we=20 have identified the following measures that must be = taken:

improve our understanding of flood risk through assessing both = the=20 probability and consequences of flooding from all sources including = surface=20 water;

put in place a long-term strategy to reduce flood risk; set out = the=20 Government=92s short, medium and long term strategic flood = prevention aims;=20 assess funding needs; and ensure effective and prioritised = allocation of=20 resources and delivery over the medium and long term in line with = future=20 Government spending rounds;

ensure that the planning system prevents inappropriate = development in=20 flood risk areas, and that any essential new development in high = flood-risk=20 areas is flood resistant and/or resilient;

raise awareness in areas where flood risks are significant, = encourage=20 actions to mitigate and minimise the risks and costs of being = flooded; and=20 provide information about how to obtain flood insurance;=20 and

promote access to insurance for low-income households. =

6. The revised statement of principles, published on the ABI website, = will=20 apply from 1 August 2008. It remains subject to additional review in the = event=20 of any significant external shocks, such as a withdrawal of flood = reinsurance.=20 The statement of principles will not apply to any property built = after 1=20 January 2009.

HM GOVERNMENT
ASSOCIATION = OF BRITISH=20 INSURERS
JULY 2008

AREAS OF CONTINUING WORK FOR COMPLETION OVER NEXT 12 = MONTHS

Improving flood risk assessment

Establish timetable for incorporation of the EU Floods Directive = into law.=20

Establish how to streamline arrangements for providing available = flood=20 risk data from the Environment Agency to insurers in an appropriate = format=20 under agreed licensing and charging arrangements that enable insurers = to use=20 the data for assessing risk, underwriting, pricing and administering=20 insurance.

Reducing flood risk

Produce the first version of modelling of flood and coastal = erosion risk=20 management scenarios for a 25-year period, to inform the = Government=92s=20 Long-Term Investment Strategy. These will be published in Spring 2009 = and show=20 the impact, outcomes and funding implications of a range of policy=20 options.

Establish how flooding from surface water will be better managed = in the=20 future, including necessary progress on who will lead this work, how = this will=20 be funded, the responsibilities and powers that will be needed, and = ensuring=20 an appropriate regulatory environment for those responsible to = encourage flood=20 management measures: this will feed into the Government=92s Floods and = Water=20 Bill to be published in draft in Spring 2009. =

Establish and complete a review of outcome measures for the = Environment=20 Agency, assessing in particular the case for including measures for = the=20 protection of commercial property.

Development planning policy and building = design

Establish if any policy reforms are needed following the = evaluation of the=20 planning policy framework for flood risk.

Establish how to improve building design in flood risk areas; and = how to=20 encourage homeowners to take steps to protect their homes = (consultation=20 expected in=20 = 2008). &= nbsp; &n= bsp; &nb= sp; &nbs= p; = ; = &= nbsp; =20

Page = last=20 modified: 11 July 2008
Page published: 11 July 2008

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