After months of negotiation, the insurance industry and the UK Government have agreed a proposal to provide affordable flood insurance for households in flood risk areas. The Government and the Association of British Insurers (ABI) have agreed a Memorandum of Understanding on developing a not-for-profit scheme – Flood Re – that would ensure flood insurance remains widely affordable and available. Consultation on the proposed scheme is open until 8 August, and it is hoped that Flood Re will be operational from summer 2015. ABI members will continue to operate the existing Flood Insurance Statement of Principles until then.
Also this month, a committee of MPs has published a report on flood risk, which recommends substantial rises in spending on flood defences (£20m year on year for 25 years) to match the increasing risk of floods. It also notes its dismay at delays to the implementation of sustainable drainage provisions and, while welcoming the agreement on flood insurance, seeks greater clarity on how Flood Re will operate.
- Consultation on GOV.UK: Insurance in areas of flood risk
- ABI: ABI and Government agree Memorandum of Understanding on scheme to safeguard UK flood insurance
- ABI: The future of flood insurance: what you need to know about Flood Re
- BBC: Flooding deal ‘to cap insurance premiums’
- Guardian: Dealing with uncertainty: the insurance industry and climate change