Inland flooding risk - Issues facing the insurance industry

The insurance industry is increasingly concerned about the possible increase in flood related claims in the UK due to the potential impacts of global warming and increased development in the floodplain. This paper describes a national research project commissioned by the Association of British Insurers (ABI) to inform their future policy on inland flood risk. It follows similar research into coastal flood risk undertaken during the 1990s. The principal objectives of the study were to inform ABI members on the background and key issues affecting flood risk and to obtain an initial estimate of the maximum probable exposure to claims for inland flood damage. This involved a review of available data and methodologies for determining potential flood damage and use of readily available GIS based data sources to estimate areas and assets at risk on mainland Britain (England, Wales and Scotland). Some key findings are that: Between 950 000 and 1.2 million properties are at risk within the inland floodplain The total insured value of properties at risk is approximately pound 35 billion Losses of between pound1 and 2 billion could be experienced under a major event or consecutive series of events The ABI is also developing a more pro-active approach to reducing flood risk. This includes becoming increasingly involved in the planning process with respect to new property and its location, encouraging sustainable drainage and building practices and working with government for more effective prioritisation of flood defence expenditure. The results of the study are being published as one of ABI's ongoing series of research reports to be used as a basis for making representations to government as well as briefing the insurance industry.