Released on: November 29, 2007, 2:40 am

Press Release Author: Alexandra Lewis

Industry:

Press Release Summary: Insurers could remove flood cover in more areas of the UK if
the government does not start investing in adequate flood defences rapidly.
Insurance broker Aon is warning property owners that they could become more exposed
to recovery costs as high risk, uninsurable regions become more widespread following
an inevitable reassessment by insurers of their role in dealing with flood claims.


Press Release Body: Insurers could remove flood cover in more areas of the UK if the
government does not start investing in adequate flood defences rapidly. Insurance
broker Aon is warning property owners that they could become more exposed to
recovery costs as high risk, uninsurable regions become more widespread following an
inevitable reassessment by insurers of their role in dealing with flood claims.

The warning comes as the Association of British Insurers expects to pay £3 billion
for flood claims from the latest series of disasters, while the government has only
committed to spending £800 million on long term protection. Bill Gloyn, chairman of
European real estate at Aon, believes that the government must face up to investing
in infrastructure to prevent claims from happening in the first place. The
alternative would have to be a state supported insurance pool to handle claims, as
it did for terrorism. Without that, the lack of insurance would cause widespread
breaches of commercial contractual obligations - to banks, landlords and tenants -
let alone the personal suffering to families in affected areas.

Bill said: "Recent public concern on flooding has focused on climate change and
rising sea levels. We now have tragic evidence that a few token sandbags are no more
likely to hold back the Thames in full flow than they will the might of the North
Sea. The government must face up to its responsibility to protect the expanding
areas of high flood risk, many of which have resulted from lax planning controls in
the past. We know that Tewksbury and Upton-on-Severn are prone to flood yet they
suffer regularly. The latest events have identified new hot spots that should be on
the government radar.

"Property owners must be prepared for insurers removing flood cover in their region
in response to this heightened risk. The insurance market cannot be realistically
expected to continue to bear the burden of years of government failure to invest
adequately. Owners can obviously take action to improve the resilience of buildings,
such as moving electric supplies off the ground and storing valuable property on
upper floors. But ultimately these individual measures will provide minimal
protection in comparison to a sophisticated flood defence infrastructure that can
only be set up by the government."

Aon UK is ranked by A.M. Best as the number one global insurance brokerage based on
brokerage revenues and voted best insurance intermediary, offering classic car
insurance, high value home insurance, entertainment
and media liability insurance and construction insurance.


Web Site:
http://www.commercialservices.aon.co.uk/commercialservices/microsites/entertainment/


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