This isn’t just a personal disaster. It’s a warning sign of a much broader crisis.
The risks associated with climate change are breaking the insurance industry. In the past decade alone, flood frequency has increased fourfold in the tropics and 2.5 times in mid-latitude regions). In the UK, at least one in six people already live with flood risk, heavy-rainfall extremes are increasing, and expected annual damages could rise by 27% by the 2050s.
Insurance claims from extreme weather are surging. The Association of British Insurers (the UK insurance and long-term savings trade body) reports a record £585 million in home weather-damage payouts for 2024.
Climate change is driving more frequent and severe events, pushing traditional insurance models to their limits. Insurers are left with little choice but to raise premiums sharply or withdraw coverage entirely. When insurance becomes unaffordable or unavailable, households are exposed, property values fall, mortgages become harder to secure, and the risk of a wider financial crisis grows.
Our research into the insurance industry shows that UK resilience is falling behind. Policymakers in the UK tried to avert an insurance crisis by launching Flood Re in 2016, a joint scheme between government and insurers designed to keep insurance affordable for households in high-risk areas. It was meant as a temporary bridge, due to close in 2039 once stronger flood defences and better land-use planning are in place.
But progress has been painfully slow. In January 2024, the House of Commons public accounts committee reported that the government’s £5.2 billion flood defence programme is 40% behind schedule and expected to protect just 200,000 properties by 2027 — far short of its original 336,000 target.
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