Climate change and housing demand is putting more properties at risk - but smart insurance and policy changes could help
By Laurie Goering
LONDON, Nov 20 (Thomson Reuters Foundation) - As climate change brings more intense storms and rising seas, Britain faces rapidly growing and shifting flood threats - something few of those at risk are yet aware of, officials and insurers said on Friday.
This lack of awareness - combined with fast-increasing demand for new housing, limited available land and often disjointed policymaking and regulation - mean efforts to keep people and property safe are struggling, they said.
About 5.2 million homes and other properties in England are at risk of flooding - but only a third of people living in those areas believe they face a threat, said Julie Foley, director of flood risk strategy for Britain's Environment Agency.
And fully two-thirds of properties in England rely on infrastructure - from roads and railways to power plants and water treatment plants - now menaced by flooding, she said during an event on flood risk at London Climate Action Week.
Sea levels have risen about 16 cm (6 inches) in Britain since 1990, Foley said, making coastal areas more vulnerable to storm surges.
And heavier rainfall is worsening surface floods away from rivers and shorelines, in places "where we never previously expected them", as rain cannot run off fast enough, said Sean Walkden, property claims manager for British insurance firm NFU Mutual.
Beverley Adams, head of catastrophe insurance for Marsh Risk Consulting and a member of the government's flood roundtable, said her own home flooded this year because of blocked drains, even as she fielded flood-emergency calls from others for work.
She has now become more vigilant about checking drains - but for others, particularly businesses, the problem will be harder to manage, she said.
Owners of flood-prone homes in Britain can buy affordable insurance through Flood Re, a government and insurance industry initiative that shares the cost of flood risk across all home insurance policies sold.
Businesses, however, do not have access to it - and, hit by more frequent and severe flooding, are finding it harder to find or afford coverage, if they ever had it, raising the prospect of growing company failures.
Ian Bartholomew, co-founder of insurer FloodFlash, is stepping into that gap with a new product in Britain: parametric flood insurance, where the insurer and insured agree that if a flood hits a certain height, a pre-set payout will happen.
A sensor is established on a building's outside wall, and if triggered - and the flooding confirmed by means ranging from weather data to news or social media posts - a payout is rapidly issued.
After storms Ciara and Dennis slammed Wales in February, drenched FloodFlash customers got payouts as soon as the next day, allowing them to quickly make repairs and reopen, Bartholomew said. With traditional insurance, which requires a claims visit, "it can be months, if not years, before people get their money", he added.
But in a world where flooding is likely to become much more frequent, quick recovery is crucial, said he and others, who are working towards a "flood on Friday, back up on Monday" model in a bid to keep businesses afloat.
Bartholomew said such insurance offerings also give business owners an incentive to invest in pumps, flood-gates or other means of curbing damage to try to hold down premiums.
Parametric flood insurance is so far available only to businesses, but might be one model to continue affordable home insurance after the scheduled end of the Flood Re programme in 2039, he added.
The cost of flood insurance for homes in Britain is set to continue rising as climate change brings more severe rainfall and higher sea levels - but also as more homes are built on floodplains, planners said.
Foley, of the Environment Agency, said the number of homes on floodplains in England was expected to double in the next 50 years.
"We have huge pressures for growth in this country and government ambition to build more homes," she said. "That presents us with a real dilemma."
Hugh Ellis, director of policy for the Town and Country Planning Association, which campaigns for reforms in Britain's planning system, said increasingly relaxed planning permission rules meant more homes were going up in high-risk zones.
The extent to which climate change planning and deregulated development were moving in opposite directions was "really quite extraordinary", he said, noting he could see 60 new homes being built on a floodplain just from the window of his own house.
Most local authorities "don't plan for 50 to 100 years" in the future, and builders - with no liability for flood damage to homes they site - have no financial incentive to change their practices.
"Their business model is not plugged into what might be called stewardship," Ellis said. "I am absolutely sure we'd see a much better standard of development if developers had any liability."
Just as important, he said, many homeowners and communities do not want to discuss climate change and flood risks, fearing it might hurt their ability to get insurance or drive away buyers and investment.
That is true even in extremely high-risk coastal communities which might eventually need to relocate, he said.
"Honesty is not happening locally and politically," he said. "The greatest failure in climate change, like in all disasters, is a failure to imagine... a future you can't prepare for."
Effectively cutting flood risks will require everything from rethinking planning rules to pulling in architects and interior designers to consult on home flood-proofing designs that do not put off potential buyers, specialists said.
"Aesthetics matter a lot to homeowners," said Matthew Eagle, head of global model solutions for U.S.-based insurance firm Guy Carpenter.
Standards are also needed for flood-protection work on homes and businesses - from flood-gates to self-closing air bricks - to ensure those who invest in lowering risk get something that works, said Nick Hill, a property claims lead for London-based insurer Aviva.
"People can be left thinking they have good resilience when they don't," he added.
(Reporting by Laurie Goering @lauriegoering; editing by Megan Rowling. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters. Visit http://news.trust.org/climate)
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