Skip to main content
Article

How ready is the UK for future flood events?

Climate Quantified|Environmental|Reinsurance|Willis Research Network
Climate Risk and Resilience

By Nalan Senol Cabi | November 11, 2020

A recent panel in which I participated explored how the UK Government and insurers can help to reduce and mitigate flood risks from climate change.

Recently I had the privilege to be part of a panel discussion alongside Avi Baruch of Previsico and Ralph de Mesquita of Zurich UK, and hosted by Jonathan Swift of Insurance Post, about UK flood risk.

The policy paper on the national flood and coastal erosion risk management strategy that the Government released this summer was the focal point. The strategy provides a framework for operational and decision-making purposes in the short-term as well as goals for the nation over the next 10 to 30 years.

It indeed marks a serious commitment from the Government to make sure the UK is more resilient to major weather events associated with climate change. But as our panel discussed, it nevertheless raises the question of just how ready is the UK for future flood events, given that climate projections show a higher likelihood of more frequent and intense rainfall events1 where sea level rise impacts coastal flooding as well2?

For those who missed the coverage of the discussion, here’s a quick recap of Jonathan’s questions (and some of the background to them) and my responses.

Is the plan adequate?

In 2011, the Government set aside £2.6 billion to better protect 300,000 homes between 2015 and 2021. In the 2020 Strategic plan, the Government committed to doubling the budget for flood and coastal erosion risk management to £5.2 billion between 2021 and 2027 to better protect a further 336,000 homes and properties. That means, protecting, in total of, 636,000 homes and properties by 2027. That’s quite a significant number, but is it enough?

With this plan, the Government is aiming to create climate resilient places that facilitate a greener, cleaner, and more resilient future. It has three goals; a) risk mitigation and flood protection, b) resilient infrastructure investment, and c) education to create a more disaster-ready nation. In addition to this strategy, in 2019 the Government set a new target requiring the UK to bring all greenhouse gas emissions to net zero by 2050.

I think it’s a well-thought out, comprehensive to do list for the Government and the nation. The Government has set out quite an ambitious strategy. But the key will be the execution of this plan, which will require centralized monitoring of each task at community level. Also, it’s critical to practice whole catchment management rather than for individual towns to make sure efficient flood mitigation practices are put in place.

Does the effort stop with the package?

What could be done outside the proposed Government package to make the UK more resilient to major weather events such as floods?

The strategic plan is still allowing new development on floodplains. Floodplains are the lungs of the river network. Rivers need that space to compensate high flows/high volumes. If those areas are suffocated, when rivers swell, they flood.

So, I think absolutely no new development on floodplains and providing space and storage on floodplains where there is existing settlement will help mitigate flood risk. If we must build on floodplains, then we need to incorporate flood mitigation measures as a standard requirement by altering the building code and making the environmental permit application requirements more stringent. A Property Flood Resilience Code of Practice could help shape new building regulations, but it might be better to avoid building on floodplains completely.

Flood defences play a significant role when it comes to managing flood risk, but they are not the only solution to manage flood risk. Defences can be quite costly. It requires a substantial budget to build new defences and maintain the existing ones. Research done by a cat modelling company estimates an average annual investment of £1 billion will be necessary to maintain the existing level of protection in the UK3,4.

There are many ways to mitigate flood risk; using sustainable stormwater storage systems for built areas, incorporating nature-based solutions into landscape designs and using property level mitigation solutions are just some examples.

Insurance industry’s role

What is the insurance industry doing - and can it do in the future - to help individual and small and medium enterprise (SME) policyholders prepare for - and reduce the impact of - flooding on their properties?

Investing in flood risk management makes societal and economic sense. During the recent UK Climate Risk conference, Environment Agency Chair, Emma Boyd Howard said in her keynote speech: “…for every £1 used to improve protection from flooding and coastal erosion, we avoid around £5 of property damages”5.

I think, insurance has an essential role to play to unlock those financial benefits. For the insurance industry to get involved in risk mitigation measures, quantifying the impact is key. That’s why key areas of focus within the Willis Research Network (WRN) are to quantify the impact of climate change on flood risk and identify and communicate uncertainties about flood risk. For example, WRN is conducting exclusive research to quantify the impact of mitigation measures in order to provide advice to the insurance industry for better, more risk reflective pricing and using insurance to promote build back better schemes.

Where there is a protection gap and conventional coverages are not available or are uncompetitively priced, there is the potential to provide alternative risk transfer solutions, such as parametric insurance.

UK floods under lockdown

What concerns would you have if the insurance industry had to respond to a flooding event this winter whilst the UK is in either full or partial lockdown?

The insurance industry is well-equipped to respond to flooding events in the UK. Insurance carriers are no strangers to supporting their customers right after devastating floods events and paying out sizeable sums after each event. They have fast and efficient claims adjuster teams and they provide guidance on using flood resilient building materials and applying available government funds such as the £5,000 Property Flood Resilience Recovery Support Scheme for businesses and households. Building back better and reducing the overall flood risk is clearly of interest to the insurance industry.

In disaster response, speed and efficiency in deploying funds can make a big difference. Even though there are disaster relief funds available, they are not the fastest reserves to access.

Another important aspect of disaster management is communication between key stakeholders before, during and after a catastrophic event. Local governments should be in sync with the central government, suppliers and the insurance industry for efficient response to increased utility demands, urgent shelter/food access and fast funds to reduce the down time of businesses and households.

End note: Consultation response

Readers of this blog might also be interested to read Willis Towers Watson’s response to the Committee’s inquiry, again stressing the importance of collaboration between the insurance industry and Government to reduce the risks and levels of damage through improving access to flood risk mitigation measures. This expands on the need to leverage insurance solutions, integrate climate considerations into mainstream finance and ensure a risk first approach.

References

1 https://www.metoffice.gov.uk/research/climate/understanding-climate/uk-extreme-events-_heavy-rainfall-and-floods

2 https://www.metoffice.gov.uk/research/news/2019/uk-sea-level-projections-to-2300

3 https://www.abi.org.uk/news/news-articles/2019/06/inland-flood-defences-save-the-uk-1.1-billion-a-year/

4 https://www.rms.com/blog/2019/06/18/the-value-of-flood-protection-quantifying-the-benefits-of-defenses-along-uk-rivers

5 https://www.ukclimaterisk.org/presentations-day-1-is-the-uk-on-track-to-adapt-to-climate-change/

Author

Research Manager: Flood Hub

Contact Us