Adoption of property flood resilience (PFR) measures could have a large impact on projected flood losses in the UK, according to a study by JBA Risk Management.
The study was conducted following the launch of Flood Re’s Build Back Better initiative, which enabled insurers to fund up to £10,000 for each individual property on PFR measures, putting the insurance industry in the forefront of delivering PFR.
JBA created a model of flood risk impacts up to 2050 on UK residential properties, 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.
JBA found that in 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 £2.4 billion will result in a loss reduction of £350 million a year. This translated into a return on investment in a little under seven years.
Applying a worst-case climate change scenario at 2050, JBA’s model showed that if 4.1% of current at-risk properties across the UK adopted PFR measures this year, it would also balance future losses. The overall investment of £3.2 billion would result in a yearly loss reduction of £453 million, leading to a return on investment in just over seven years.
“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,” said Jane Toothill, managing director of JBA Risk Management. “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.”
“We welcome JBA Risk Management’s findings which clearly demonstrate just how impactful and affordable the investment in property level flood resilience and resistance measures under our Build Back Better scheme can be,” said Andy Bord, CEO of Flood Re. “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,” Bord said. “Of course, the insurance market's efforts must be combined with continued government investment in the flood and coastal defences despite ongoing economic pressures.”
