Following the assault by the Association of British Insurers on Government funding for flood defenses (See IJ web site Oct. 10), Risk Management Solutions has weighed in with a report that the “£800 million [$1.633 billion] promised by the UK Government for additional flood defenses will only provide partial protection, as the true extent of the risk is underestimated.”
RMS explained that in addition to “river and coastal flooding, large parts of the UK are exposed to flash flooding caused by heavy rainfall overwhelming inadequate drainage, which accounted for a large proportion of the damage from the summer’s events. Taking account of all types of flood risk, RMS estimates insured losses of £1.5 billion [$3.06 billion] every 25 to 35 years.”
Dr. Claire Souch, senior director of model management at RMS pointed out that the UK’s Environment Agency “only has a mandate to assess the risk of river and coastal flooding, so other major sources of risk are not covered in its maps. For there to be a viable market for insurers, the Government needs to understand the true picture of flood risk, and implement appropriate protection measures.”
She compared the situation in the UK to RMS’ experience in the U.S., which has shown that “when a major flood disaster occurs and people have insufficient insurance coverage, taxpayers usually end up footing the bill as governments are forced to provide disaster relief from central funds.”
The bulletin also noted that the UK is “almost unique in offering flood insurance as standard; it is uncommon in other high flood-risk areas such as the major river systems of Continental Europe and the US.” Having no flood insurance, however, appears to encourage people to make their homes more flood resistant. Dr. Souch cited “raising floors, using tiles or stones instead of carpets, and waterproofing or increasing the level of electrics,” as examples.
She added that the “devastation caused by this summer’s flooding should encourage UK homeowners to start investing in these types of initiatives, which would raise their chances of securing flood insurance.”
RMS also noted that “climate change is likely to increase flood risk in around 50 years’ time, so new developments should take this into account, particularly in coastal areas where sea levels are projected to rise.”
A full report on the UK floods, and other information is available on the RMS web site at: www.rms.com
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