The future of UK flood policy

The increasing damage and disruption caused by this increase in flooding has had implications for the affordability of insurance. In an attempt to solve a burgeoning affordability crisis, the UK Government and insurance industry established the Flood Re reinsurance scheme which came into force in 2016.

This policy paper sets out the IFoA’s position on the achievements of Flood Re so far, and the longer term issues that various actors need to grapple with in order to ensure its success.

Key findings:

• More needs to be done to ensure that flood defences are strengthened while the Flood Re scheme is in place. Flood Re is a temporary measure rather than a long term solution. If high risk of flood persists, insurance will continue to be unaffordable for those living in high risk areas.
• Increased spending on flood defences is only part of what is required to ensure homes and businesses are sufficiently equipped to cope with future flooding. More joined-up thinking between government, environmental organisations, planners, homeowners and the insurance industry is necessary to help manage the risks associated with flooding.
• The Government should create a workable, proactive, long-term strategy for dealing with flood risk. This means dealing with the root causes of flooding. A strategy needs to be implemented that recognises the changing nature of flooding and the impact of more frequent and extreme weather.