Land use planning and climate change: role of insurance Jane Milne Head of Household and Property ESPACE International Conference 29 November 2005

Changing costs of extreme weather Costs doubling each decade Since 1990, $16 bn each year on average 2004 was costliest year on record: Central European Flood - $40 bn Hurricane Katrina $40 – 60 bn UK Floods: Autumn 2000, Boscastle, Carlisle, North Yorkshire

UK Flood Cover UK is unusual in offering flood cover as a standard feature of household insurance Typical premium is £320 per year Average flood cost £15 – 30k Only sustainable where flood risk is managed.

ABI Statement of Principles Provide flood cover as standard feature under normal competitive market for those at 1.3% annual probability of flooding (1-in-75 yr) or less Continue cover in areas where defences will be in place in next five years that reduce risk to 1.3% annual probability or less Use best efforts, on a case-by-case basis, with existing policyholders where no defences are planned and risks are unacceptably high

ABI Project “Making Communities Sustainable” Potential financial costs of flooding arising from additional development in the growth areas Most effective approaches to manage the risk in coming decades

Land Use Planning Policy (PPG25) Performance 2001/ / / 04 Sustained objections made on flood risk (where outcome is known) Proportion of applications going ahead against sustained objection 37%21%23% Major developments going ahead contrary to EA advice

Key features of PPG25: Sequential approach potentially powerful, but: EA only consulted on half applications 1-in-5 applications where EA sustains its objection are approved Only half final decisions reported back to EA Land Use Planning Policy (PPG25)

Mapping Development Sites onto Flood Map Source: Environment Agency, NERC/CEH, UK Hydrographic Office, Ordnance Survey

Annual Costs of Flooding to 2016

Adaptation 1a. Floodplain Avoidance Ashford, M11 and South Midlands - Between % losses removed due to effective planning (PPG25) -100% savings in some locations (Aylesbury, Bedford, Kettering) Thames Gateway - Limited scope for floodplain avoidance - very low savings

Adaptation 1b. Sequential test behind defences Ashford, M11 and South Midlands - Higher development density results in % savings in most locations Thames Gateway - Increased savings for most areas ( %)

Adaptation 2. Reduce Vulnerability Increasing development density = Decreased damages (up to 58%) Greatest impact in ‘significant’ flood risk areas Increased construction costs per home ( %) Additional benefits at groundlevel (car parking etc.)

ABI Guidance - Strategic Planning for Flood Risk Planners and developers should consider key flooding and development issues when carrying out an appropriate flood risk assessment for their development plan Key considerations: – LOCATION OF NEW DEVELOPMENTS: sequential planning approach – DESIGN OF NEW FLOOD DEFENCES: standard of defence and tackling aggregation – TYPES OF HOMES: fully-certified resilient construction methods – SITE CONSIDERATIONS: sustainable drainage

Stronger planning system to avoid flood risk where possible, including clearer role for Environment Agency and allowance for climate change Code for Sustainable Buildings should include resilience to climate change (but still better to avoid floodplain) Conclusions