Government needs to make flooding a priority

The "silly season" appears to have taken on a new meaning with the dramatic impact of the floods. Unusual weather has been sweeping across the Earth, and this summer it has been the UK's turn to experience the devastation the weather can reap.

Although some will say the floods were a result of 'climate change', others will argue that bad planning, a 19th century drainage system and the mismanagement of waterways contributed to water being unable to drain away.

The truth probably lies somewhere in between, but it is the insurance industry who will have to pick up the tab. It is lucky the flooding has occurred after three years of relatively benign weather in the UK and insurers' reserves are well stocked, and it appears the industry has coped relatively well with the huge deluge of claims, in particular the loss adjusters.

The challenges facing the industry around flooding are now inseparable from the Government's efforts to create more "affordable housing". Prime Minister Gordon Brown has announced that three million homes are to be built by 2020, thousands of them will be on flood plains. At the same time the funding for flood protection was slashed by £15m last year. Reacting to this cut in flood defence spending, in August last year, Jane Milne, head of property insurance, at the Association of British Insurers warned: "The challenge we face from flooding is greater than ever before and we urge the government to give this issue sufficient priority and resources."

The insurance industry has every right to be concerned and has no desire to take away the possibility of cover, however, there are limitations to the tolerance of insurers - especially in areas at major risk of flooding.

Already Gordon Brown has announced an increase in flood protection funding to £800m, although the £200m annual increase will not be fully available until 2010/2011. The government needs to work more closely with the industry to make sure this is spent wisely, and the Environment Agency needs to be more open to insurers with its flood defence data, especially on maintenance. We have learned this summer that there are no short cuts in keeping the waters at bay.