Warning more homes will be uninsurable due to flood risk

Warning that more homes could become uninsurable because of flood risk

Aviva’s chief says it “doesn’t make sense” to keep building homes in flood zones as the danger grows.

The head of insurance giant Aviva has said homes are being built now that may become uninsurable in future because of flooding risk.

Amanda Blanc said flood risk is “absolutely increasing”, but under current building trends 115,000 new homes will be constructed in flood zones over the next decade.

“That doesn’t seem to me to make sense. We need to think about where those homes are being built,” she told the BBC.

The Environment Agency says about 6.3 million homes and businesses in England are exposed to flood risk, and Aviva research found that one in nine homes built between 2022 and 2024 are at medium to high risk of flooding.

In the Big Boss Interview podcast, she said England was “for sure” building homes that could one day be uninsurable.

“It’s very well known where these flooding areas are. Let’s think very carefully about homes that are being built.”

Blanc said building next to flood zones also requires a different approach.

“You can do all sorts of different things to your property to make it more or less vulnerable to flood,” she said.

Aviva’s research shows that nearly a third of new homes built in 2024 will face some flood risk by 2050, and one in seven will be at medium to high risk as extreme weather becomes more severe.

Earlier this year, the Met Office estimated that, with current levels of global warming, record-breaking wet winters like the one seen in the UK in 2023-2024 have shifted from once-in-80-year events to once-in-20-year events.

In a wide-ranging interview, Blanc also urged the government to avoid policy “kite flying” ahead of Chancellor John Healey’s first Budget on 28 October.

Aviva is a major UK private pension provider, and Blanc said speculation around the last couple of Budgets over pension changes caused a sharp rise in withdrawals.

“Effectively we saw in the last year 30 times the normal withdrawal from pensions that we would normally see, which is clearly something which customers may regret afterwards because once you take your tax-free lump sum out, you can’t put it back in,” she said.

“So we would say be very, very thoughtful about the things that you are testing, thinking about.”

Blanc said Aviva was “ready with capital” to invest in infrastructure, noting that the company already invests more than £100bn in the UK, including £35bn in infrastructure ranging from hospitals and schools to windfarms.

“We’ve got that capital. We want to invest, we’re a big UK employer. We want to invest in UK infrastructure. It provides good returns for our pension holders and for the members of those pension schemes,” she said, though she added that more detail was needed to make it happen.

However, she said possible lower annual pension increases if the triple lock is changed would have knock-on effects.

“If you’ve got a lower state pension then you need a higher private pension, don’t you? So you need to think about that balance,” Blanc said.