Guy Carpenter: Industry must embed climate adaptation measures in products
(Re)insurers must move faster to embed climate risk mitigation and adaptation measures in products to help enhance resilience, according to Charles Whitmore, international public sector lead at Guy Carpenter.
Whitmore was speaking following a webinar co-chaired by the reinsurance broker with Flood Re, the UK’s flood reinsurance backstop, around the flood resilience of the UK’s built environment.
Panellists said flood-related mitigation and recovery plans spanning multiple critical stakeholders must be introduced to provide a more sustainable and economically viable approach to resilience across the UK.
Andy Bord, CEO of Flood Re, said a more all-encompassing approach to flood risk management was needed that extended beyond more effective flood defences and into the wider built environment.
“Over the next 30 years, climate change will increase UK annual flood losses by up to 80 percent,” he said.
“While £1.1bn a year of flood damage is being prevented by the UK’s existing network of river barriers and coastal defences, it is not enough to just build higher defences to hold back the water. We need to learn to adapt.”
Bord said it was critical flood considerations are prioritised when planning decisions are made to develop new homes or retrofit existing homes.
“Such considerations are also central for householders at high risk of flooding. By taking action now I believe we can adapt and ‘build back better’ – an approach we have been advocating for over four years.
“This is what must happen to ensure the built environment is more prepared for and resilient to future flooding.”
Julie Foley, director of flood risk strategy and national adaptation at the Environment Agency, said there was a fundamental need to “get better at planning and adapting to the unavoidable impacts of climate change”.
She said the agency was currently updating guidance so that all new flood and coastal defences in England are designed to account for a range of climate impacts, including from a 4°C rise in global temperature by 2100.
“We are also refreshing our strategic approach to tidal flood risk management for London and the Thames Estuary to the end of the century,” she said.
Whitmore said the theme of resilience was gaining increasing resonance in discussions around public sector de-risking.
“We believe that sessions such as this are essential in helping all stakeholders to further understand the benefits of improved risk mitigation measures to move towards risk-based pricing,” he said.
“The (re)insurance market needs to move faster to embed risk mitigation and adaptation measures in the insurance product and thereby incentivise consumers to own more of this process.”