Chancellor Rishi Sunak’s Budget 2020 spanned areas such as the coronavirus outbreak, infrastructure, wages and taxes, as well as environmental priorities. Of the measures announced, the government’s flood defence investment plan received more of a ‘welcome, but’ reaction from the insurance industry.
According to Sunak, a record £5.2 billion will be poured into flood defences within a period of six years with the goal of better protecting 336,000 properties in the UK. The Association of British Insurers (ABI) welcomed the “much-needed extra investment” but lamented that the amount isn’t enough.
“The investment of £5.2 billion over the next six years will come as some relief to those communities across the country at flood risk who live with the distress and disruption that flooding causes,” commented ABI director general Huw Evans.
“However, this still falls short of what the ABI has said is needed, £1.2 billion a year, to meet the growing risk of climate change. We look forward to seeing further details on this announcement.”
Concurring, Aviva’s global chief executive of general insurance Colm Holmes said the insurer welcomes the plan but at the same time pointed to the need to do more.
Holmes explained: “Increased funding for flood defences is an important step, but we still believe Government also needs to take urgent action and prioritise stricter planning and building regulations to prevent new homes being built in high-risk areas without adequate flood protection or property resilience measures.
“Since 2009, over one in 10 new homes have been built in high-risk areas, and without more stringent planning regulations more people and properties will be put at risk, especially as they do not benefit from Flood Re.”
In Aviva’s view, a holistic approach to flood prevention should be the way to go. Similarly, Swiss Re sees the investment as something that must be part of a concerted and coordinated effort.
