BIBA response to Defra consultation on policy options for promoting property-level flood protection and resilience

31st October 2008


The British Insurance Brokers’ Association (BIBA) is the UK’s leading general insurance intermediary organisation. We represent the interests of insurance brokers, intermediaries and their customers.

BIBA represents 2,300 insurance intermediaries including 98 of the UK’s top 100 insurance intermediaries. Our members handle about half the value of all UK home, contents, motor, travel, commercial and industrial insurance policies. Independent insurance intermediaries distribute nearly two-thirds of all UK non-marine general insurance, of which BIBA members account for more than 80%. They also introduce an estimated £20 billion of premium income into London’s insurance market each year.


BIBA is pleased to have the opportunity to respond to the Defra consultation on policy options for promoting property-level flood protection and resilience. 


Our responses to the 20 questions set out are as follows:



Q1. Do you think that the costs and benefits for the measures outlined here and in the Impact Assessment (Annex B) are reasonable estimates? Do you have further information to help refine the estimates?


A1.  BIBA have no information that disagrees with these estimates.



Q2. Do you think that the Government needs to give more information to high-risk and help them do more to protect themselves? Alternatively, do you think that the level of property-level flood protection and resilience should be left to market forces and individual choice?


A2.  Yes.  The Government should provide more information including surveys and improved flood maps.  Implementing flood protection and resilience measures should be left to market forces and individual decision – apart from legislation on resilient repair in building regulations which would require further consultation.  


Q3. If a government grant scheme were to be introduced, do you agree that it should initially focus on households rather than businesses?


A3.  BIBA believes that both household and small businesses are important in the context of any future Government grant scheme. We would envisage that if financial resources are limited then the most vulnerable households may need to take priority


Q4. Do you think that a free home survey scheme to households in high-risk communities would be an effective way to drive increased take-up of property-level flood protection and resilience? What else could be done to encourage greater voluntary take-up of measures?


A4.  Yes, BIBA thinks that the free home survey report should be consumer friendly, and explain the range of flood protection options.

BIBA will encourage the insurance industry to offer more incentives to those who invest in property level flood protection.



Q5. Is it reasonable to expect people living in high-risk areas to pay much or all of the cost of protecting their homes from flood damage? What viable options exist for supporting lower-income households?


A5.  BIBA believes that self payment in high risk flooding areas is reasonable in certain circumstances. If someone chooses to live by a river where regular flooding has occurred, it is not reasonable that they are given funding. However, those who live in an area that has become high risk due to council actions that cause a greater risk of flooding should qualify whether a low income household or not . However any future planning should take into consideration development and potential flooding and any remedial work needed for a minimum of 5 years


We are not aware of existing options that exist for lower income households, but in the future, insurance brokers can arrange low cost contracts for those living in social housing and on low incomes.



Q6. Is it appropriate to use public funds to subsidise the costs of flood protection or resilience for individual properties, rather than just paying for a free home survey?


A6.  BIBA believes that public funds should be used to deal with the causes rather than the effect of flooding on individual property.



Q7. Do you have suggestions on how we could ensure that any future grant scheme is simple to administer but also fair? Do you think that it would be a good idea to deliver the free surveys or the subsidies via teams who already deliver similar schemes, such as those responsible for private sector housing renewal?


A7.  BIBA support the need for simplicity but are not in a position to comment further on this issue.


Q8. Should any subsidy scheme offer full subsidies for a small number of high risk properties or partial subsidies for a larger number of properties? Is a £4,500 cap for the measures themselves (excluding survey) an appropriate level for the subsidy?


A8.  BIBA favour partial subsidies for a larger number of properties. We agree with the concept of a cap subject to the survey result meeting pre-determined criteria or high risk. We believe flood protection equipment and implementation costs should be exempt from VAT.


Q9. Should the subsidy be offered to all appropriate at-risk properties or only low-income households or communities? Should the subsidy be available to all those on qualifying benefits or based on full means-testing?


A9.   The subsidy should be offered to all appropriate at risk properties. And those most at risk


Q10. Do you think that the costs and benefits for the government schemes outlined in the Impact Assessment (Annex B) are reasonable estimates? Do you have further information to help refine the estimates?


A10.  BIBA are not in a position to comment on this issue at this time.


Q11. Which approach do you think will be most effective at increasing take-up – offering free home surveys to households in a large number of high-risk communities, or offering to subsidise property-level measures for households in a smaller number of communities?


A11.  BIBA believes that free home surveys will be most effective at increasing take-up.


Q12. How could local authorities, the Environment Agency and communities best work together to deliver property-level schemes? What should their respective roles be?


A12.  The Environmental Agency must take clear leadership in the deliverance of property-level schemes.


Q13. What would be the most effective ways of consulting with members of the selected communities in order to communicate risk information, help them understand flood protection and resilience, and engage them fully in the schemes?


A13.  BIBA consider that the most effective way of communication would be the local council, which should engage with local interest groups, residents associations and parish councils. 


Q14. Do you support an approach that promotes local flexibility of spend or do you prefer a more nationally consistent approach?


A14.  BIBA support a uniform and consistent approach determined by the relevant local body and monitored to ensure adherence to national standards.



Q15. Which professional groups are appropriate for the role of conducting household flood risk surveys? What more needs to be done to increase capacity and expertise on flood risk issues amongst these professional groups?


A15.  Professional groups in the insurance industry – BIBA/ABI/CILA/AIRMIC are all knowledgeable and could provide surveys on many occasions.  A consistent standard of competence to a minimum level is required.


Q16. How can we encourage new innovative flood protection products, while ensuring a robust system for testing new products? What is needed to provide assurance that products are suitable for their intended use, such as the reinstated BSI Kitemark or an alternative quality assurance mark?


A16.  “Infires”, the Insurers Fire Research Funding Scheme, is an appropriate body who replaced the loss prevention council.


Q17. Do you think we have identified the correct costings and the range of costs are right? Do you agree with our analysis of the costs and benefits of flood resilience (Annex C)?


A17.  BIBA have no reason to disagree with this costing analysis.



Q18. In the event of a major flood, would the supply of skills and materials be sufficient to enable the resilient repair of all affected homes? Would bottlenecks in the supply system cause delays in restoration?


A18.  We agree with the concept of resilient support. We believe it is worth waiting a little longer to achieve resilient repair as a sensible long term solution.



Q19. Do you think that an independent quality-assurance standard would help to encourage resilient repair? Are there other viable voluntary approaches?


A19.  BIBA support the concept of an independent quality-assurance standard to encourage resilient repair.  Insurers have approved repairers who they may require to meet their standard.


Q20. Is compulsion an appropriate way to increase the use of resilient repair in high-risk areas or do you think individual consumer choice is the right route? Would you support a compulsory requirement for resilient repairs if an economic case could be made for such a requirement?


A20.  BIBA’s position here is similar to its stance on Fire Regulations. If the building regulations and the public authorities clause is contained in an insurance policy and are worded so that it applies to a greater than 1 in 75 year chance of flooding then resilient repairs should be compulsory.


If the chance of flooding is less likely than 1 in 75 years, e.g. 1 in 200 years, then there should be no compulsory requirement for resilient repair.                                                           


BIBA believes these issues are of great importance to the insurance industry. BIBA will, on behalf of its members, continue to promote the availability of flood insurance through its expert members who have a wealth of knowledge and experience.


BIBA would request that they be included on any further Defra consultation papers or communications in respect of this subject going forwards.


Thank you for taking the time to consider our response. If you have any further queries please contact Graeme Trudgill, BIBA’s Technical and Corporate Affairs Executive for further information on 02073970218 or on [email protected] or Steve Foulsham, BIBA’s Technical Services Manager on 02073970234 or [email protected] .



Yours sincerely

Eric Galbraith

Chief Executive


Direct Tel:  020 7397 0201

Direct Fax: 020 7626 9676

Email: [email protected]