Written evidence submitted by RSA Insurance
Group plc
EXECUTIVE SUMMARY
With a 300 year heritage, RSA is one of the
world's leading multinational quoted insurance groups. Within
the UK, RSA is the largest commercial lines insurer and one of
the UK's top three personal motor and household insurers, providing
insurance direct through our More Th>n brand.
In response to the increasing risk of flooding,
RSA has developed our own Geographical Risk Assessment (GRA) tool,
which uses height and flood risk data to assess the risk of flooding
from natural sources down to an individual property level. This
tool ensures that we are able to gain a good understanding of
risks and means that some people can obtain insurance with RSA
where they would have been excluded by other insurers who only
use postcode level mapping.
We are also proud of our response to flood events.
During the 2009 floods, we were able to use the latest technology
to pinpoint exactly which of our customers had been hit by flooding.
This meant we were able to contact them pro-actively, in some
cases even before they registered their claim and respond rapidly
with direct assistance on the ground. We are also currently working
with the World Wildlife Fund (WWF) on a unique project to promote
the use of Sustainable Urban Drainage Systems (SUDS).
Unlike most other European countries, the UK
insurance industry is unusual in providing flood cover to homeowners
as a standard feature of home and small business insurance cover,
even to those in high-risk areas. This cover is currently provided
as part of the Statement of Principles for flood insurance, which
ends in June 2013. With the frequency, severity and costs of flooding
expected to rise, this agreement is being reviewed and the Association
of British Insurers (ABI) has stated that the present agreement
will not be renewed in its existing form. The industry is looking
to Government and Parliament to demonstrate a clear commitment
to continuing, planned investment in spending on flood defences
and we believe that such a commitment is vital to protect citizens
and communities and prevent economic damage.
The Floods and Water Management Act 2010 dealt
with some of the issues related to flooding. However, RSA believes
there are still gaps in effective flood and water management in
England and Wales, including:
— the setting of targets for reducing flood
risk;
— continued investment in flood defences;
— an effective planning policy; and
— the promotion of Sustainable Urban Drainage
Systems (SUDS).
RSA's response is designed to complement and
add context to the submission provided by the ABI.
RESPONSES TO
QUESTIONS
Q1: Which of the key issues covered by the
consultation into the draft Flood and Water Management Bill and
by the Walker and Cave reviews should be taken forward as legislative
priorities?
In RSA's view, effective implementation of the
Act is a higher priority than additional legislation. There are
areas where uncertainty remains; for example, regarding the responsibilities
imposed on local authorities. It is important that the measures
yet to be enacted are properly delivered and that Government takes
a holistic view.
Q2: Which further policies are required to
ensure flood and water management delivers optimum social, economic
and environmental outcomes.
1) Targets for reducing flood risk
Over the past decade, there has been a shift
from reducing flood risk to managing flood risk,
both of which are very different things and carry very different
risks for insurers. We need a statement from the Government of
their vision for flood risk management in the future.
RSA believes that ministers should set out targets
to systematically reduce the number of properties at risk of flooding
and articulate how this is to be achieved. This is something that
is set out in the Climate Change Act (for carbon reduction targets)
and such targets for flooding would give both insurers and communities
the confidence that the Government is serious about managing this
increasing risk.
2) Continued investment
For every £1 investment in flood defences,
£8 is saved to the economy.[7]
While the need for spending restraint is understood, continued
investment in flood defences should remain a priority for Government.
Any short-term restraint in public spending
on tackling flooding should be coupled with prioritisation of
the most high-risk areas for available funds.
3) Proper planning controls
RSA welcomed the introduction of Planning Policy
Statement 25 (PPS25). However, we are concerned that implementation
is not aligned across the country. Clear attention must be given
to curbing construction in areas exposed to high flood risk. It
is important that the "localism" agenda does not detract
from the national picture.
4) Widespread adoption of Sustainable Urban Drainage
Systems (SUDS)
The insurance industry is committed to working
with the Government and other partners to explore new flood defence
solutions. RSA has recently announced a global partnership with
the WWF, part of which will result in a SUDS policy paper being
published in November 2010. This will include recommendations
for Government, insurers and developers, all designed to increase
the use of SUDS. We would be delighted to share this paper with
the Committee when it is launched.
RSA is also supporting a project at Mayesbrook
Park in East London, working with the Thames River Restoration
Trust (TRRT) and the local council to restore the Mayesbrook River—an
example of SUDS in action. Again, we would be delighted to brief
the Committee in more detail and arrange a visit if that would
be of interest.
Our hope is that in promoting SUDS through the
WWF/RSA policy paper and the Mayesbrook Park project, more developers
will take up these techniques in their planning, providing communities
with a more natural environment and insurers the confidence that
flood risk is being factored into the planning process.
Q3: Any issues related to the Flood and Water
Management Act 2010 (including sustainable drainage systems (SUDS)
and the transfer of private sewers and lateral drains)?
RSA were pleased to see that the automatic right
to connect was removed as part of the Flood and Water Management
Act. However, surface water flooding remains a hard to quantify
risk and we agree with the ABI's calls for sewerage companies
to be properly consulted.
October 2010
7 "Flooding in England: A national assessment
of flood risk", Environment Agency publication, 2009 Back
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