Flood management requires a comprehensive understanding of risk, says Claire Souch.

According to a report by the National Audit Office in June 2007, 4.3 million people in England alone currently live in properties in flood risk areas, a situation that was highlighted during the summer floods last year.

A persistent southerly jet stream brought continuous wet weather across the UK through May, June and July 2007 – with two particularly wet systems stalling over southern England, causing significant widespread flooding and total insured losses of up to £3.5bn.

The flooding emphasised the risk associated with flooding directly from rainfall overwhelming drainage systems, and pooling in low-lying areas. Hull, for example, particularly suffered from this, in addition to rivers overflowing.

The scale of insured losses are likely to severely test the private insurance market and will lead to a serious re-consideration of the affordability and availability of flood insurance cover. However, there is no reason why not all properties in the UK should be insurable if prices are based on a full understanding of the technical risk.

An issue with understanding the full technical risk is that flood risk maps provided by the Environment Agency only cover flooding as a direct consequence of rivers overflowing. It is only by taking account of all flood risk, by using tools such as probabilistic modelling, that this risk can be priced properly and managed.

“The scale of insured losses are likely to severely test the private insurance market and will lead to a serious re-consideration of the affordability and availability of flood insurance cover.

Claire Souch Director of model management, Risk Management Solutions

Property planning and development should therefore involve not just local and national governments and their agencies, but also the insurance industry, and the probabilistic risk assessment tools it employs, to give a sophisticated insight into the costs and benefits of managing flood risks effectively.

Future implications of climate change should also be taken into account when planning today’s developments. Sea level rises and changes in rainfall patterns mean that the areas at risk in 50 or more years’ time could be quite different to today. Future-proofing the next generation’s risk profile should be a priority now.

The tools are available today for use both within the insurance industry and more broadly by the planning authorities to ensure flood risk is mitigated now and in the future.

Claire Souch
Director of model management, Risk Management Solutions

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