Over the past few months, we’ve seen significant flash flooding in London, devastating foods across Belgium and Germany and extreme heat in Canada. These extreme weather events are becoming more severe and more frequent, and it’s vital we understand how to adapt, said Andy Bord, chief executive officer of Flood Re, a joint initiative between the UK government and insurers.
“I don’t think there’s enough attention on adaptation at the moment. Those acts of climate change are already in the system, it’s essential we understand how to adapt,” said Bord.
“From Flood Re’s perspective that’s how to adapt homes to make them more resilient against flooding, and planning to make sure that we’re not making the situation worse and that we’re building in the right places in the right way, making the UK housing stock more resilient rather than less resilient to flooding in the future.”
Speaking with the 1.1 Club, Intelligent Insurer’s digital hub for one-on-one interviews with industry leaders, Bord provided an update on Flood Re’s work, noting that since the initiative’s launch in April 2016, more than 350,000 people have benefited from a Flood Re-backed policy.
Four out of five homes with previous flood claims have experienced a premium price reduction of more than 50 percent, and 98 percent of homes at risk of flooding are now able to access quotes from more than five of the insurance brands backed by the scheme.
A joint effort
Ahead of the 2021 United Nations Climate Change Conference (COP26)—taking place in Glasgow between October 31 and November 12, 2021—Flood Re has called for the industry to meet the challenge of climate change and flooding.
“There’s an opportunity to identify where investment for future green initiatives may come from and this encompasses flooding. When we make these sorts of interventions, there are often other benefits that can arise at the same time,” said Bord.
“Changes can be made in the landscape with joined-up government policy whereby you see benefits in terms of flooding, an increase in biodiversity, and a reduction in carbon. By looking at and financing—and this is where the insurance industry comes in—those interventions in the round, there are real opportunities to make a step-change in the environment in which we live.”
In July last year, the UK government announced a record £5.2 billion ($7 billion) investment over the next six years to tackle the risks of flooding and coastal erosion and make the country more resilient to future flooding.
While the investment has been welcomed by Flood Re, Bord believes that we need a commitment over a longer term (ideally 10 years) to enable “big strategic projects to be appropriately prioritised and invested in”.
He added that it’s very important that those flood defences are adequately maintained and that it is “absolutely a government responsibility to make sure that happens”.
A joint Association of British Insurers and Flood Re report, published in June 2021, found that every £1 spent on flood defence maintenance, saves £7 in spending on new defences.
“Insurers offering household insurance will be able to put their customers back into a better and more resilient state after a flood repair.”
Andy Bord, Flood Re
Building more resilience
Flood Re’s focus on adaptation and resilience is evidenced fully in the work for its latest campaign ‘Build Back Better’.
Bord said: “When Flood Re was created, we sat behind the insurers and we were the reinsurer in a very pure sense. If an insurer wanted to make incremental repairs, for example where you’re flooded and the insurer concluded you’d benefit from a flood door, they could only cover that at their own cost.”
Flood Re is currently in the final stages of agreeing the ‘Build Back Better’ campaign which is expected to launch in the first quarter of 2022.
“Insurers offering household insurance will be able to put their customers back into a better and more resilient state after a flood repair so if they’re unlucky enough to have a flood event in the future, they will be better protected against it,” said Bord.
Essentially, it would permit the payment of claims to include an additional amount for resilient or resistant repair, above and beyond the original damage.
“Build back better is a way that the insurance industry can ensure that a home that’s been flooded isn’t put back into the same state at the same risk of future flooding, and that can make a real difference,” said Bord.
Flood Re’s efforts have not stopped there. The joint initiative has been lobbying the UK government for the introduction of Flood Performance Certificates (FPCs).
“In the same way as an Energy Performance Certificate, when you buy, sell, or rent a property, the use of an FPC will make the household more informed about their flood risk, what interventions have already been put in place, and what you can do further to improve the resilience of your home,” he added.
By having that information, said Bord, you can drive up the value of your home. Currently, if people make changes and make their homes more resilient, they’re often “blighted by reducing the amount they can achieve when they try and sell the property or in some extreme cases not even being able to sell the home at all”, he warned.
“Some quite big structural changes can be made and these frequent weather events are reminders that we can’t put these things off and do them at some point in the future. We need to make real progress on them quickly,” he concluded.
To view the full 1.1 Club interview click here
Main image: Shutterstock / D MacDonald
“These frequent weather events are reminders that we can’t put these things off and do them at some point in the future.”
