Aon disagrees with flood cover withdrawal proposal

Europe

The insurance industry has challenged the sense of the Environment Agency’s call for insurers to take a stand against developers planning to build on flood plains. The chief executive of the Environment Agency, Baroness Young, recently said insurers should withdraw cover to deter developers from building on flood plains when they have been refused planning permission. Aon said it was not the industry’s place to be the de facto regulator. Bill Gloyn, chairman of European Real Estate at Aon, said: “Shifting the responsibility onto insurance companies to be the final arbiters of building development is an incredible suggestion from Baroness Young. This is merely a smokescreen to hide the decades of government under-investment in flood defences –as identified in the recent National Audit Office report. Insurers and brokers have always played a role in risk management…However, the escalation of that role to provide teeth to the statutory planning process would be unprecedented. This would surely be outside any insurer’s remit, extending into aspects of political and social policy.” In July, Aon warned that insurers could remove flood cover in some areas of the UK if the government did not start investing in adequate defences. “The ABI has now indicated that the patience of its members is wearing thin”, Aon said.