Storms Isha and Jocelyn grabbed the headlines last month, not long after the interim findings of The London Climate Resilience Review[i]. The jury seems to be out on whether the recent storm activity can be linked to climate change, but there is little doubt that we are experiencing heavier rains[ii] while 2023 was predicted to be the second warmest year on record in the UK[iii].
The independent review, commissioned by the Mayor of London, was designed to take stock of London’s preparations for climate change, and to make recommendations to advance London’s climate resilience. Of course, it’s not just London impacted by extreme flooding and extreme heat; other major UK cities are being impacted by our changing climate.
The review was commissioned in the wake of extreme flooding in the capital in 2021, when aggregate insured losses were estimated to be over £100 million[iv], and were closely followed by the 2022 heatwaves. The Review’s interim conclusion was that London is underprepared for the frequency and severity of climate change.
Insurance professionals don’t need a report to tell them this news. After all, the industry has already faced a 21%[v] rise in subsidence payouts following the 2022 heatwaves and flash flooding of basements causing devastation in London[vi]. The question is, what can the insurance profession do to mitigate risk to its policyholders while minimising claims payouts?
With the average cost of flooding to a home being £30,000[vii], the committee stresses the need for the management and maintenance of flood defences to be addressed in law. Many of the recommendations made by the committee also call for a more tailored approach at a local level. An example of this already in action is The London Surface Water Strategic Group[viii]. After the surface water floods in 2021, the Mayor convened the group, bringing together public and private sector partners to decide how to address surface water flood risks strategically throughout London.
Other proposals from The London Climate Resilience Review committee included public engagement work, fast-tracking work that can be facilitated locally (like de-paving front gardens), and creating public and community spaces for water attenuation.
The Mayor of London is all too aware of the risk of flash flooding to the capital. In June 2022, he sent leaflets to owners of 45,000 basement properties to raise awareness about what to do in a flood. While we wait for the review’s full findings later this year though, the threat of surface water flooding remains.
Flash flooding is becoming a regular occurrence[ix] in many urban, high-density areas due to the reduced permeability of surfaces (paved drives for example), clay soils, and ageing drainage and sewage systems. As the issue of flash flooding and basement flooding continues, the need for a comprehensive, swift and accurate assessment of environmental risk from insurance quote to claim is imperative to help minimise physical, emotional and economic damage to home insurance policyholder’s and their properties.
Geospatial data intelligence datasets are already being used by insurance professionals across the UK for just these reasons, including the LexisNexis® Basements Indicator. This combines multiple data sources[x] to create a unique attribute that helps property insurance providers identify whether a basement or an underground level may be present in a home or a commercial building. This data can be accessed by insurance providers at the point of quote via LexisNexis® Informed Quotes and for more detailed risk visualisation through LexisNexis® Map View, a cloud-based geospatial data visualisation tool.
Just imagine the difference, knowing upfront that a basement may be present in a property. Not just in risk assessment for pricing and underwriting, but importantly, in knowing which policyholders could be impacted when a storm occurs, allowing them to offer risk mitigation advice and tailored cover in advance. As a flash flood occurs, insurance providers would also gain an immediate understanding of their exposures, make informed decisions about new business in the defined area, and know where to direct on-the-ground support.
Our climate is already changing, and it’s reassuring to see committees in place and actions proposed to help reduce climate impacts. In the meantime, using geospatial data intelligence can make a crucial difference in risk assessment and help ensure adequate protection for homeowners in the here and now.
[i] https://www.london.gov.uk/programmes-strategies/environment-and-climate-change/climate-change/climate-adaptation/london-climate-resilience-review
[ii] https://www.metoffice.gov.uk/about-us/press-office/news/weather-and-climate/2023/new-research-shows-increasing-frequency-of-extreme-rainfall-events
[iii] https://www.metoffice.gov.uk/about-us/press-office/news/weather-and-climate/2023/2023-was-second-warmest-year-on-record-for-uk
[iv] https://www.london.gov.uk/sites/default/files/2024-01/LCRR%20interim%20report%20press%20release%20FINAL%20%281%29.pdf
[v] https://www.abi.org.uk/news/news-articles/2023/9/home-insurance-payouts-up-11/
[vi] https://www.london.gov.uk/press-releases/mayoral/mayor-warns-londoners-in-basements-about-flooding
[vii] https://www.london.gov.uk/city-hall-blog/london-flood-awareness-week-2021#:%7E:text=The%20average%20cost%20of%20flooding,to%20help%20prepare%20for%20flooding
[viii] https://www.london.gov.uk/programmes-strategies/environment-and-climate-change/climate-change/climate-adaptation/surface-water-flooding/londons-surface-water-strategy
[ix] https://www.metoffice.gov.uk/about-us/press-office/news/weather-and-climate/2023/new-research-shows-increasing-frequency-of-extreme-rainfall-events
[x] Including open-source data and public sector information licensed under the Open Government Licence v3.0 and subject to: OS data © Crown copyright and database right [2023]; Royal Mail data © Royal Mail copyright and database right [2023]; and National Statistics data.
Content provided by Caroline Elliott-Grey, product manager, UK and Ireland, LexisNexis Risk Solutions, Insurance.
