Storms again thrust flood insurance into the limelight
British insurance companies continue to clash with the government as floods throughout the United Kingdom continue to draw attention to the need for a comprehensive flood insurance plan. Insurers have been backing the Flood Re program for the some, which aims to provide coverage for some 200,000 consumers that could lose coverage if the insurance agreement currently in place is allowed to expire. Flood Re is meant to replace this agreement, but the government continues to show concern over the financial prospects of the program.
Several storms spark floods, more on the way
Powerful storms have caused widespread flooding in much of the United Kingdom. Floods have caused significant damage to properties and have lead to business interruption for numerous companies, both large and small. More storms are expected to hit the UK in the coming weeks, which is expected to put further pressure on the government’s current flood insurance agreement. The country’s insurance companies suggest that if an agreement is not reached soon, consumers may lose access to the flood insurance they are currently relying on.
Insurers preparing defenses against climate change
The European Environment Agency recently reported that climate change is expected to increase the power and frequency of natural disasters in the future. The insurance industry has long been attuned to this potential threat and has been steeling itself against the possibility of a new era of natural disasters that could produce catastrophic loss. In terms of flood insurance in the United Kingdom, insurers are hoping to establish a surcharge on premiums collected through the Flood Re program.
Flood Re funding pool may be adequate approach to mitigating loss
The Flood Re program is designed to have consumers contribute to a universal funding pool that would cover the cost of claims. Insurers believe that a surcharge placed on this fund would help prevent insolvency as it would help participating insurance companies establish a more comprehensive monetary safety net. Government officials have expressed concern over this approach because of the continued financial problems that the United Kingdom, as well as the rest of Europe, continues to struggle with.
