Summer floods to cost £3bn
The insurance industry needs to improve its risk assessment after taking a £3bn hit following the summer floods while business must take responsibility for its contribution to climate change, according to industry experts.
The Association of British Insurers (ABI) has estimated that claims from this year’s extreme weather could cost double the amount usually budgeted for by the industry.
Floods devastated a number of regions in England during the summer, including Yorkshire, in June, and Gloucestershire and Oxfordshire, which were hit in July.
Speaking on Thursday at a conference organized by environmental charity Global Action Plan, Jane Milne, head of the property and creditor team at ABI, said the costs represent two-thirds of what the industry expects to pay out in a “bad” year.
She said: “We claim to be the risk experts, and we will invest much more in understanding what the future risks will be.
“It is clear that the old industry practice of taking the last 50 to 100 years of data and using that to underwrite insurance will not be effective anymore.”
She criticised the Government’s pledge to increase spending on flood defences by just £200million and called for changes to future housing development to place more emphasis on flood risks.
Delegates at the conference, entitled The Wave of Change for London Business were warned that they would also need to adapt to a changing climate and to the predicted flooding of the Thames if sea levels rise in the future.
Business leaders were urged to do their bit to reduce their contribution to the problem.
Trewin Restorick, director of Global Action Plan, told delegates: “There are some companies I see who really get this issue and some who don’t.
“But I think, increasingly, there are companies who do get it.”
He told businesses to look at their practices, the behaviour of their staff, and even their products and identify ways to make positive changes.
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