Government urged to 'wake up' on flooding insurance

The insurance industry has called on the Government to raise its game on flood defences.

The Association of British Insurers (ABI) said that in the light of last summer's floods, a 25-year strategy was needed to tackle the heightened risk.

In particular, the ABI would like the Government's Environment Agency to be given more responsibility for managing and tackling flood risk. It also wants planning authorities to ensure new homes are not built in flood plains.

The Government has already pledged to raise its spending on defences from 600m a year to 800m by 2010-11.

"This summer's devastating floods highlight the urgent need for a long-term strategy based around more investment, national co-ordination and better planning of land use," said the ABI's director-general, Stephen Haddrill.

The ABI expects the insurance industry to be faced with a final bill of around 3bn for the summer deluge, spread between 165,000 claimants. It said the floods were a "final wake-up call" and that failing to take action now will "simply increase the cost of action later".

However, there was no hint from the industry about going back on its long-held pledge to continue offering cover to homes in flood-risk areas.