The evolution of UK flood insurance: incremental change over six decades

Abstract

The evolution of UK flood insurance: Incremental change over six decades Our theorising here shifts away from the catalytic role of the flood itself -or other crises -towards a deeper understanding of the relationship between change and stability, taking the example of UK flood insurance and the agreements -and the implicit policy approaches -between the relevant actors involved: the private insurers and the government. This research relies upon in-depth analysis of the policy agreements governing flood insurance since the 1960s, and semistructured interviews with six current or ex-flood insurance professionals. We have found that the important agents of change have been, firstly, the threat to existing household insurers from new entrants unencumbered by agreements to insure all-comers. Secondly, the march of technological change has made exposure more explicit and pricing risk both easier and less expensive. But the slow pace of change and the relatively stable role of the different actors and coalitions is now clearer. The many significant windows of opportunity created by major flooding or financial crises have not significantly affected the pace or direction of policy change. The overriding importance of the London location for -and the profitability of -the insurance industry, both to government and to the insurers themselves, is our explanation for the extraordinary policy stability that we have described. This particular history suggests that the UK may not be a good model for imitation elsewhere.

Justice and flood risk management: reflecting on different approaches to distribute and allocate flood risk management in Europe

“…Private insurance system clearly fits within the utilitarian model (Johnson et al 2007), where the industry is focussing to ensure the greatest return to the shareholders. Further, the insurance system cannot fit to the egalitarianism approach, because usually the most vulnerable people at high risk are most likely uninsured (Lamond et al 2009;Holub and Fuchs 2009;Penning-Rowsell et al 2014). The interconnection between the private insurance system and the public policy of flood risk management can be understood as a dialectical interaction, where the private interests of householders and businesses-affordable insurance bills and access to mortgage-have become part of the general interests.…”

Sharing the burden of increasing flood risk: who pays for flood insurance and flood risk management in the United Kingdom

“…This can also be seen as a spectrum, ranging between centralised decision-making whereby flood risk management decisions are taken by nationally based trained flood professionals (as in the UK in the past (Penning-Rowsell et al 1986)), to decisions being the sole responsibility of the at-risk property owner (now being encouraged by the UK government (Department for Environment, Food and Rural Affairs (Defra) 2004)). Politicians are also responsible for decisions about funding and the powers given to the institutions involved in flood risk management.…”

The Role of Insurance in Reducing Direct Risk - The Case of Flood Insurance

“…Even within well-developed insurance markets clear differences with regards to the provision of flood insurance exist, as the example of Europe demonstrates (see Penning-Rowsell et al, 2014). Some observers identify a growing 'flood resilience gap' in developed markets -with the level of insurance cover for flood and other disaster losses being fairly static, while state disaster relief expenditure is increasing, as recently seen in the United States (Weiss and Weidman, 2013).…”

“…Recent work investigating the flood insurance provision in the United Kingdom includes Ball et al (2013), Stallworthy (2013), Penning-Rowsell et al (2014), and Surminski and Eldridge (2014). Flood insurance in the context of developing countries is receiving growing attention, as the work from Ranger et al (2011a), Lin et al (2007), Linnerooth-Bayer et al (2011) and Surminski and Oramas-Dorta (2013) show.…”