NU Online News Service, June 29, 3:25 p.m. EDT
Responding to a report issued by a government agency, the Association of British Insurers is calling on the British government to adopt a long-term strategy to deal with flood threats there.
ABI called it "vital" for the government to take steps to deal with potential flooding in the wake of an Environment Agency report, released this month, that one in six homes in England are at risk of flooding.
The report said the government will need to double its spending to ?1 billion (U.S. $1.66 billion at the current exchange rate) by 2035 to maintain and build adequate defense to protect threatened homes.
Increased spending is necessary, the report advised, as climate change increases the risk of coastal erosion and flooding from rivers and the sea.
Unless the money is spent on these defenses, the report warned property damage and business loss could rise from ?2.5 billion ($4.14 billion) to ?4 billion ($6.63 billion) by 2035.
Investing in protection, the report said, could avert damages estimated at up to ?180 billion ($298 billion) over the next 100 years.
Unlike the United States, flood insurance is provided by private insurers in Britain. The ABI has an agreement with the government that insurers will provide flood insurance to the vast majority of customers until 2013. In return, the government made a long-term commitment to deal with the issue of flooding and ensure a competitive marketplace remained for the majority of customers by 2013.
Currently, Risk Management Services said six countries have been affected by widespread flooding in Central Europe, with the Czech Republic with Austria the worst hit.
Flooding is not expected to be as bad as in 1997 and 2002 when devastating deluges hit the region.
According to one report from RMS (Central Europe Flooding, August 2002, Event Report) total economic damage from the 2002 flood amounted to EUR15 billion ($21 billion at the current exchange rate) of which 15 percent was insured. That flooding was worse than in 1997, RMS said.
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