An Insurance Perspective Professor David Crichton Association of British Insurers

World wide insurance losses Natural Catastrophe Losses - Decadal Totals Source: Munich Re, January 2000

UK Weather Claims Costs Source: ABI Statistics Bulletins

UK Storm Claims October 1987 –1 million claims, cost £1,400 million January/February 1990 –3 million claims, cost £2,400 million Reinsurers paid 60% of the claims costs then. Now they would only pay 20% 1993 “Braer” Storm, 915 millibars (European record low, 912 millibars)

UK Subsidence - nearly £1m a day £ million incurred costs Source: ABI Statistics Bulletins UK Domestic subsidence total cost over last ten years: £3338m

Increased Flooding? Medium-low Medium-high 2020s2050s2080s Source: UK CIP Technical Report No 1

Government and insurers... May 1998, Sarno floods in Italy, the Italian Government paid the equivalent of 150m Euros in compensation to victims. April 1998, Midlands floods in England, insurers paid the equivalent of 232m Euros in compensation to victims. - but many low income families in the UK cannot afford insurance.

The Risk Triangle Hazard Vulnerability Exposure A Framework for Adaptation?

Example: Flood Risk Insurers are becoming more pro active They are increasingly taking steps to manage vulnerability and exposure ABI wants to help Government to manage hazard. It has funded major research projects and shared the results with Government.

Dealing with Hazard New methods for calculating return periods Remote Sensing for better flood mapping Importance of SUDS Analysis of sea defence capability Guarantee of continued cover but only so long as Government is seen to be taking action.

Dealing with Vulnerability National Flood Claims Database - 25 insurers contributing Importance of building standards Resilient reinstatement?

Dealing with Exposure Scottish NPPG 7 - Flood Appraisal Groups Draft PPG 25 for England Financial Services Authority’s new policy.

Adaptation Priorities More resilient, mandatory, building standards and quality assurance inspections, for new build, reinstatement and renovation. Stricter planning control in flood risk areas and on contaminated land. Take climate change into account in design of drainage, flood defence, and buildings.

To Conclude... The insurance industry has a role to play. The ABI welcomes dialogue with the Government and its agencies. Association of British Insurers: