In the wake of this summer’s flooding in Britain, the Association of British Insurers (ABI) is urging the government to take action on the flood risk to prevent similar devastation in the future.
At the time of the flooding in June and July, Jane Milne, ABI’s Head of Property, predicted that the cost to the insurance industry would reach at least £1 billion, but in a statement yesterday, Stephen Hadrill, Director General of ABI, said the figure is likely to exceed £3 billion.
Insurers have dealt with more than 130,000 claims for homes, business and motor vehicles since the flooding occurred. “Ministers appreciated the enormous contribution of Britain's insurance industry to dealing with the trauma and loss caused by these floods,” said Mr Hadrill. “Without these efforts, huge additional costs would fall on the taxpayer, way above the £53m currently committed.”
He continued by saying that ABI are pressing the Government to act quickly in order to reduce further flood risks associated with river, coastal or surface flooding, and commented on the Flooding Lessons Learned Review, led by the Cabinet Office and independent overseer Sir Michael Pitt.
“We urged ministers to bring forward the planned increased spending on flood defences and flood management, currently promised for 2010-11. And we stressed that ministers should act quickly once the Pitt Review on lessons learnt has concluded its work.” he concluded.
After the meeting between ABI and Government officials, Floods Recovery Minister John Healey, said: “It was a very useful meeting where the ABI said that out of a total of at least 130,000 claims, by the end of August one in five of household claims had been settled and 10% of business claims. While awaiting updated figures they expect this now to have reached around 25% of households and 15% for businesses. They also reported virtually all motor claims have been settled.
“While I appreciate this will be of little comfort to those still living in temporary accommodation it does show real progress and I want to thank the industry for their efforts to date, and they made clear their commitment to maintain this momentum over the coming months.”
At the height of the flooding, Abbey Home Insurance received 8,600 claims in one week – more than half the total amount usually received for flood damage in one year. Abbey also said that an estimated 5,000 of the homes affected by flooding (about a quarter) were not protected with adequate home insurance.
Steve Johnson, head of Home Insurance at Sainsbury’s Bank, commented: “Home insurance policies vary dramatically so its essential people compare policies not only on price but also on the level of cover they provide. Quality cover such as unlimited buildings insurance doesn't have to be expensive and although premiums have been rising, by shopping around and taking advantage of discounts such as ours, there are significant savings to be made.”
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