The Association of British Insurers (ABI) is urging the government to make investment in flood defences a priority, despite the squeeze on spending.
Speaking at the Local Government Flood Forum, the Association’s director of general insurance, Nick Starling, said a long-term flood prevention strategy, backed by the right level of investment, is crucial if homes, services and businesses are to be properly protected.
The ABI estimates for every £1 spent on protecting communities from flooding, £8 is saved to the economy.
Under an agreement with the Government the body has pledged to make flood insurance as widely available as possible until 2013 but in return ministers will need to deliver a long-term flood management strategy, with the right level of investment, plus planning policies that stop new homes being built in areas at high risk of flooding.
According to the ABI, a two degree temperature rise would increase average annual insurance losses by £47 million, with the risk of a once in a century event increasing by £769 million.
In such a scenario, the cost of insurance would rise by 16%.
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