Indemnifying against flood loss in a changing environment

Abstract

The UK, as elsewhere, faces new environmental uncertainties, especially from climate change. The sustainability of the UK's existing flood loss indemnity regime in respect of property harm is threatened by factors that include greater ecological awareness on the part of policy makers, pressures to limit public commitments to flood defence, and insurers' increasing technical capacities to differentiate risk exposure across particular locations. The basis of current reliance on the commercial insurance market is called into question, as general levels of insurance availability and affordability come under threat. In turn, differential impacts from more restricted availability or terms of cover are likely increasingly to affect vulnerable individuals and communities, which will further intensify pre-existing take-up problems among particular groups. Key themes relate to issues that arise from this changing law and policy environment, including challenges to the delicate public-private balance that has underpinned the current arrangements, implications both for civil society as well as the insurance industry, and the extent to which alternative approaches might offer solutions.