The take up of Property Flood Resilience could have a major impact on projected flood losses in the UK
The take up of Property Flood Resilience (PFR) could have a major impact on projected flood losses in the UK according to new indicative research from JBA Risk Management.
The review was carried out in the wake of the launch of Flood Re’s Build Back Better initiative which enables the insurance market to take the lead on delivering PFR, by enabling insurers to fund up to £10,000 for each induvial property on PFR measures.
JBA modelled flood risk impacts up to 2050 on residential properties in the UK, comparing the impact on typical residential houses without any property-level adaptations, with typical residential houses with both flood risk resistance measure and resilience measures in place.
Under an intermediate climate change scenario at 2050, if only 3% of properties across the UK, representing those situated in present at-risk locations, had adopted PFR measures this year, and if each property used the maximum sum available under the Build Back Better initiative (£10,000) the overall investment of £2.4bn would deliver a return with a loss reduction of £350m a year - a return on that investment in under seven years.
The same modelling, based on what is generally viewed as the worst-case climate change scenario at 2050, showed that if 4.1% of current at-risk properties across the UK adopted PFR measures this year it would also balance future losses.
Even if each property used the maximum sum available under Build Back Better initiative, the overall investment of £3.2bn would deliver a return with a loss reduction of £453m a year – a return on that investment in just over 7 years.
Jane Toothill, managing director at JBA Risk Management commented: “The Build Back Better initiative is a major step forward in helping homeowners become more resilient to flooding, and the insurance market in the UK is leading the world in its approach.
”Whilst this preliminary study provides only indicative results, it is clear that the adoption of PFR measures could have a major impact in mitigating future increases in flood losses caused by climate change. “
Andy Bord, CEO of Flood Re commented: “Not only will installation of flood resilience measures reduce the impact of future flooding on high-risk properties, but it will also help the UK to become more resilient to the changing climate, enabling householders to return to their homes sooner following a flood providing vital peace of mind.
“With more and more insurers looking to join the Build Back Better scheme the insurance market will truly be able to make a difference to customers. Of course, the insurance market’s efforts must be combined with continued government investment in the flood and coastal defences, despite ongoing economic pressures.”