Climate change and UK flooding - PwC comments

Published at 13:06 PM on 10 January 2014

Commenting on the effect of the recent continuing adverse weather patterns in the UK, Jon Williams, sustainability and climate change partner, PwC, comments:

"The flooding over the Christmas period has shown us what more wide-spread, unpredictable and extreme weather events looks like in practice, with the impacts likely to be more short term than perhaps many think.

"If the UK is to adapt to this changing climate, it needs a comprehensive and funded strategy to protect existing assets, whether they be business, households, power generation or transport, and more rigour in where new developments are sited. It is becoming increasingly clear that the growing annual costs of extreme weather events, both from insurance claims and wider economic losses, are beginning to dwarf the costs of action, and the UK needs to accelerate the build of flood defence infrastructure and ensure new development planning factors in climate resilience.

"Businesses also need to ensure they are resilient to our changing climate, and have contingency plans in place to protect their assets, people, customers and supply chains. Relying on having adequate insurance at an affordable price and public flood defence systems in place may no longer be enough."

In respect of the effect this will have on the UK insurance industry, Domenico del Re, climate change catastrophe insurance expert at PwC comments:

"UK Insurers will be eager to know if what lies ahead is an increasing trend in flood losses. Rising sea levels due to climate change will undoubtedly lead to more coastal flooding when extreme events occur, and although in the coming year we expect household premiums to fall due to increasing price competition, the impact of climate change could lead to rising premiums over the longer term. Irrespective of your views on the link to climate change or not, insurers who retain flood risks on their book even after Flood Re is in place will do well to look at changes in land use and maintenance of defences and drainage. These man-made changes are more likely to have an impact on future losses."

 

ENDS


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