UK among financially most at risk of flooding

The Association of British Insurers director general, Otto Thoresen, leaves the Cabinet Office in London, after attending a meeting with members of the government

That shocking conclusion, which places the UK seventh according to risk analysts Maplecroft, comes after the Opposition branded as a “vacuous PR stunt” a Whitehall meeting attended yesterday by ministers and insurance chiefs to examine how the industry is responding to the disastrous floods that continue to plague the Southeast and Southwest of England.

The CEOs of Aviva, Direct Line Group, Axa, Lloyds Banking Group and Ageas, along with the claims director of RSA Insurance and the Association of British Insurers used the meeting to restate their commitment to voluntarily maintaining the 2008 agreement to provide homes at high-risk of flooding with affordable insurance until the new, guaranteed affordable flood insurance scheme, Flood Re, is delivered in 2015.

The insurance companies assured ministers that there had been no evidence of insurers raising premiums for flood risk properties in advance of the introduction of Flood Re - a scheme agreed between the Government and industry last June - and that leaseholders in high-risk areas who will not be covered by Flood Re will still be able to access affordable insurance commercially.

Insurance chiefs have stressed it will take some months to properly assess and repair damage to affected properties after recent extreme weather.

Firms pledged, meanwhile, to look at their use of costly telephone lines for customers calling them for help, after consumer champion Which? raised concerns that claimants were often forced to dial 084 or 087 numbers, running up bills of up to 41p a minute. The helplines are used by 79 per cent of home insurers including Ageas, Aviva, Axa, Churchill, Direct Line, Esure, Hiscox, Royal and Sun Alliance, and Virgin.

Afterwards, Floods minister Dan Rogerson, Liberal Democrat MP for North Cornwall, said: “We had a positive and constructive meeting with the insurance industry on the steps that they are taking to get people back on their feet as quickly as possible after the flooding.

“We were reassured that they have already put in place a range of measures to look after their customers, and we have agreed with them further steps to help the recovery process including providing a team of experts to advise on delivering the new repair and renew grants and a commitment to reviewing the cost of 24-hour flood helplines. We will continue to meet on a monthly basis to ensure an effective, co-ordinated response.”

As well as £14m in emergency claims, £24m has been paid out for emergency accommodation, the Association of British Insurers (ABI) said.

Otto Thoresen, the ABI’s director general, said: “Insurers assured Ministers the situation is under control and that customers have been helped speedily and effectively since the flooding and bad weather began in December.”

Labour questioned the motivation for the meeting.

Shadow Cabinet Office minister Michael Dugher said: “The Government’s transparent attempt to try to grab a few headlines does nothing for those affected by the floods. Three hapless junior ministers booking a meeting room does not constitute a serious response to the flooding crisis. But it is indicative of David Cameron’s whole approach - out of touch and totally complacent.”

And Neville Martin, South and East Yorkshire development manager at the Federation of Small Businesses, said it makes no sense to exclude any small businesses from Flood Re: “To exclude businesses from a scheme designed to protect property holders from flooding is madness.”