| LONDON, April 3
LONDON, April 3 Affordable flood insurance could
become available to households in Britain's highest-risk areas
without government subsidies under a new scheme drawn up by
insurance broker Marsh, the company said on Tuesday.
The plan, dubbed Project Noah, would make it unnecessary for
the government to provide financial backing to insurers, seen by
the industry as the best means of guaranteeing availability of
cover in the most flood-prone regions, Marsh said.
"It takes the problem away from the British taxpayer,"
Hutton Swinglehurst, head of flood risk at Marsh UK, told
Under the scheme, insurers would pool their residential
flood exposure across low and high-risk areas. That would limit
the scope for big payouts across the pool as a whole, and enable
insurers to reinsure their flood risk at competitive rates.
Reinsurers have historically refused to provide flood cover
to individual British insurers because many of them are exposed
to one or more flood zones.
"We have the capacity available and pledged by the
reinsurance companies, and we believe we have a critical mass of
leading insurers to get going," Swinglehurst said.
Britain has been hit by severe inundations in the past ten
years, with a series of floods in the summer of 2007 costing the
insurance industry about 3 billion pounds ($4.80 billion).
Insurers have agreed to provide affordable cover to at-risk
homes in return for a government commitment to boost flood
defences under a deal that expires in June next year.
The Association of British Insurers said last month that
200,000 homes in flood-prone regions would struggle to find
affordable insurance once the agreement came to an end.
The Department for Environment, Food and Rural Affairs, the
government ministry responsible for flood defences, welcomed the
"Industry-led solutions that allow insurers to compete even
for the highest-risk homes, without government intervention in
the market, would give the best value for taxpayers' money," a
Defra plans to spend 2.17 billion pounds bolstering
Britain's flood defences between 2011 and 2015.
Britain's major residential property insurers include Aviva
, RSA and Royal Bank of Scotland's Direct Line