The boss of Britain’s biggest insurer has said that homes being built now could become uninsurable in the future because they are sited in flood-risk areas.
Amanda Blanc, the chief executive of Aviva, said the flooding threat was “absolutely increasing”.
She told the BBC: “You’ve seen a very dry summer, and what happens if you then get heavy rain on very dry surfaces is you get more surface water flooding.”
She said 110,000 homes had been built in flood areas in the past 10 years, and if that continued, a further 115,000 new homes would be built in flood areas in the next decade. “That doesn’t seem to me to make sense. We need to think about where those homes are being built,” she said.
Blanc told the BBC’s Big Boss Interview podcast that England was “for sure” building properties that might become uninsurable in the future.
“If you think that there’s an inevitability of something happening, that’s not what insurance is, right? Insurance is a pool where you know there’s a risk that something happens for some people and not for others. When there is an inevitability, it makes it very difficult for it to be insured.”
She added: “It’s very well known where these flooding areas are. Let’s think very carefully about homes that are being built,” she told planners and housebuilders. “It’s dangerous.”
About 6.3m homes and businesses in England are at risk of flooding, according to the Environment Agency. It has said this could increase to about 8m, or one in four properties, by the mid-century as the climate crisis worsens.
If a property cannot get insurance cover or it is prohibitively expensive to insure because it is prone to frequent flooding, the homeowner would have to foot the bill, with knock-on effects on their ability to get a mortgage or sell the property. Some towns may have to be abandoned as climate breakdown makes many areas uninsurable, a Guardian investigation found last year.
Blanc said a lot could be done to mitigate damage, such as using bricks with self-closing air vents, having stainless steel kitchens instead of wooden furniture and creating plug points halfway up the wall rather than near the floor.
“You can do all sorts of different things to your property to make it more or less vulnerable to flood.”
According to Aviva’s research, more than a quarter (26%), or 101,657 new homes, have some risk of flooding now, and one in seven will be at medium to high risk of flooding by 2050.
After the very wet and stormy winter in the UK in 2023-24, the Met Office estimated that such winters had gone from once in 80-year events to once in 20-year events.
Blanc also called on the government to avoid policy “kite flying” before John Healey’s first budget as chancellor on 28 October.
Aviva is a leading private pension provider, and speculation about changes to pensions led to a jump in withdrawals in the run-up to the budget in the last two years.
“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.
Blanc has come under criticism over her role as BP’s senior independent director in which she led the search for a new chair twice in a year, after the controversial ousting of Albert Manifold. She will stand down next year after five years on the board.
She said: “It’s been a tough gig, right? There’s no doubt about that, and there’s been a lot thrown at BP. But if I look at it today and the combination of a new chair, new CEO, I think that’s a good combination to take BP forward … it’s time for me to move away.”