Association of British Insurers says £800m for flood defences promised by chancellor is not enough

Insurance firms have warned the extra money government has promised for flood defences is not enough and may mean they can no longer provide cover.

The Association of British Insurers (ABI) says the £800m pledge by the chancellor in yesterday’s Comprehensive Spending Review is less than needed.

Stephen Haddrill, ABI chief executive, said the money pledged by Alistair Darling was so low that it could lead to a review of insurance services in the UK.

In June and July £3bn worth of damage was caused by flooding in parts of south-west England, the Midlands and Yorkshire.

According to ABI figures the total number of claims came to around 130,000. As a result buildings premiums have jumped 3% in the past quarter.

Meanwhile, Baroness Young, Environment Agency chief executive, is to be questioned over the floods by the Environment, Food and Rural Affairs Committee today.

Topics