Britain’s rising flood risk is further underlined today, with figures published by the ABI showing that the cost of flood damage since 2000 has leapt by 200% on the previous decade. With more people set to be at significant risk of flooding, the ABI is calling on the Government to ensure that spending on flood defences is targeted to the most flood vulnerable communities.

.One in six homes in England is currently at risk of flooding. Nearly 500,000 people face a significant flood risk, and it has been estimated that this could rise to 840,000 by 2035 without adequate investment in flood defences.1

ABI’s figures highlight the huge financial cost of flooding:
• Since 2000 insurers have paid out £4.5 billion to customers whose homes or businesses have been hit by flooding. This is up 200% on the £1.5 billion paid in the previous decade in real terms.
• Major floods since 2000 have included the 2007 summer flooding which resulted in insurers paying out £3 billion, the 2005 floods in Carlisle that cost £272 million, and the Cumbrian floods in November 2009 costing £174 million.
• Reasons for the rise in flood costs include the increased frequency and severity of flooding in the UK and the growing problem of surface water flooding (the Environment Agency has estimated that 2.8 million properties are at risk of flooding from surface water). It has been previously estimated that the total value of assets under flood risk exceeds £200 billion – more than the current budget deficit.

These figures were released at the ABI’s flood conference “Fighting Flood Risk Together” held today. At the conference over 100 representatives from the insurance industry, policy makers and community groups discussed the impact of the Government’s recent announcement of a cut in flood defence spending, and what needs to be done to tackle the UK’s flood problem.

Speaking at the conference, Tim Breedon, ABI Chairman and Group Chief Executive, Legal and General, said:

“Flooding devastates lives and communities. Insurers play a key role in helping those affected recover, but prevention must be better than cure. The recent announcement of a cut in Government investment in flood defences was disappointing, and it is now vital that Government spends its money wisely to bring real improvements where they are most needed.”

Barry Smith, Chairman of ABI’s Property Committee and Chief Executive of Ageas UK, stressed at the conference that:

“Millions of customers rely on the financial protection provided by flood insurance, and insurers are determined to do everything possible to ensure this continues. The insurance industry’s flood insurance agreement with the Government, under which insurers commit to offering flood cover to existing customers, expires at the end of June 2013. To ensure flood insurance continues to remain widely available and competitively priced, further investment in flood management is needed when the public purse is in better shape”.


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Notes

Notes for Editors

1. Enquiries to:
Liz Forster              020 7216 7444 (Mobile: 07717 578 586)
Malcolm Tarling       020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain          020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle    020 7216 7415 (Mobile: 07968 364 302)

2. 1. Figures on properties at flood risk from the Environment Agency

3. The ABI is the voice of the UK’s insurance, investment and long-term savings industry. It has over 300 members, which together account for around 90% of premiums in the UK domestic market.
The ABI’s role is to:
- Be the voice of the UK insurance industry, leading debate and speaking up for insurers.
- Represent the UK insurance industry to government, regulators and policy makers in the UK, EU and internationally, driving effective public policy and regulation.
- Advocate high standards of customer service within the industry and provide useful information to the public about insurance.
- Promote the benefits of insurance to the government, regulators, policy makers and the public.

The UK insurance industry is the third largest in the world and the largest in Europe. It is a vital part of the UK economy, managing investments amounting to 24% of the UK’s net worth and contributing the fourth highest corporation tax of any sector. Employing over 275,000 people in the UK alone, the insurance industry is also one of this country’s major exporters, with a fifth of its net premium income coming from overseas business.
Insurance and businesses protect themselves against the everyday risks they face, enabling people to own their own homes, travel overseas, provide for a financially secure future and run businesses. Insurance underpins a healthy and prosperous society, enabling businesses and individuals to thrive, safe in the knowledge that problems can be handled and risks carefully managed. Every day, our members pay out £155 million in benefits to pensioners and long-term savers as well as £58 million in general insurance claims.

4. An ISDN line is available for broadcasts.

5. More news and information from the ABI is available on our web site, www.abi.org.uk.