Editor's comment: Pulling together on flooding

At its conference Fighting Flood Risk Together, the Association of British Insurers said that £4.5bn of claims were paid out to homes and businesses in the 2000s compared to £1.5bn in the 1990s. Weather patterns are becoming more severe and there would be little surprise if the last decade's doubling of costs was exceeded by the start of 2020. With the government having reduced flood spending in October's Comprehensive Spending Review, upset insurers are now turning their attentions to the existing Statement of Principles on covering homes in flood-prone areas, which is set to expire in 2013.

Another problem to address is of homeowners facing rocketing home insurance costs after their homes have been flooded, as well as the attendant larger excesses.

There are already some alternative proposals for the government and insurers to consider, including the Morpeth Flood Action Group - so-called after the town struck in the Cumbrian flood of late 2009 that has already cost insurers £174m. It proposes that flood risks be spread across all policyholders, with insurers paying a proportion of its annual premiums to a national agency, guaranteed by the government, to cover the cost of flood damage. Its website www.morpethfloodaction.org.uk gives an excellent insight into the challenges facing both the government and insurers and, most importantly, how local communities can play a role in helping both out.

With one-in-six homes in the UK in danger of flooding and the global climate changing, the cost of flooding is only going one way: a new long-term government and insurer scheme needs to be worked out as soon as possible.

Best wishes
• Finally, a very merry Christmas and a happy and healthy 2011 to all. We look forward to continuing to provide the best management advice in insurance next year through the magazine, our digital issues and our website, www.broking.co.uk.