ABI: Agreement on flood insurance is good news for customers
The ABI (Association of British Insurers) and the Government have reached agreement that ensures flood insurance remains widely available now and in the long term.
The agreement outlines the actions that both Government and the industry will take over the long term. These include:
. Improving understanding of flood risk.
. Government putting in place a long-term investment strategy, which will set out strategic flood prevention aims and assess future policy options and funding needs
. Ensuring that the planning system prevents inappropriate development in flood- risk areas.
. Raising awareness in areas where flood risks are significant, encouraging property owners to take sensible precautions, and providing more information about how to obtain flood insurance.
. Promoting access to home insurance for low-income households.
Implementing these steps should lead to a competitive flood insurance market, without the need for the Statement of Principles, which will therefore end in 2013. Until then, insurers will continue to:
– Make flood insurance for homes and small businesses available under household and commercial insurance, where the flood risk is no worse than a 1 in 75 [1.3%] annual risk.
– Offer flood cover to existing domestic and small business customers at significant flood risk, providing there are plans to reduce the risk to an acceptable level within five years.
Floods Minister, Phil Woolas, said:
“The devastation caused by last year’s unprecedented rainfall has shown just how vital it is for people to be able to insure their homes and livelihoods against the risk of flooding.
“Working together we have succeeded in ensuring that flood cover is available in both the short and long term. I’m delighted that the industry has agreed to work with us to raise awareness and encourage homeowners to take steps to protect their homes where appropriate.”
Stephen Haddrill, the ABI’s Director General, said:
“This agreement is good news for everyone at risk of flooding. We are pleased that the Government recognises that a long-term investment strategy, adequately funded, is the best way to manage the growing flood threat. It will help ensure that the flood insurance protection, relied upon by millions of householders and businesses, remains widely available. We will continue to work closely with Government, and review progress each year.”
Notes for Editors
1. Details of the full agreement between the ABI and the Government and
details of continuing work and commitments can be found at: www.abi.org.uk, and http://www.defra.gov.uk/environ/fcd/policy/insurance/govtcommitments.htm.
The joint statement itself can be found at http://www.defra.gov.uk/environ/fcd/policy/insurance/jointstatement.htm. For more information about insurance please go to: http://www.defra.gov.uk/environ/fcd/policy/insurance.htm
For more information about insurance please go to: www.abi.org.uk
2. Government and the ABI announced the annual review of the Statement of Principles on 13 February this year. The agreement outlines the measures Government and the industry will take to ensure flood insurance remains available.
3. The Statement of Principles on the Provision of Flood Insurance applies to England. Similar discussions are at an advanced stage of agreements with the devolved Governments of Scotland, Wales and Northern Ireland.
4. The Statement of Principles will not apply to properties built from 2009.
5. The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.
6. Enquiries to ABI :
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)
An ISDN line is available for broadcasts
7. For any Defra press enquiries related to this announcement please contact Luisa Diaz on 0207 238 6043 / luisa.diaz@defra.gsi.gov.uk
Public enquiries 08459 335577;
Press notices are available on our website
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