Source · Select Committees · Environmental Audit Committee
Recommendation 18
18
Not Addressed
Insufficient investment scale to keep pace with growing climate risk.
Conclusion
Experts have been clear: the UK is not investing at the scale required to keep pace with climate risk. This fragmented approach is leaving communities and infrastructure exposed and storing up greater costs for the future, and in real terms costing more than prevention measures due to disruption and damage to infrastructure and property. (Conclusion, Paragraph 70)
Government Response Summary
The government acknowledges the impact of climate change on insurance and commits to reviewing the viability of a price-reflective insurance market from 2039, including consideration of extending the Flood Re Scheme. This response does not address the committee's conclusion regarding the inadequate scale of UK investment in climate risk.
Government Response
Not Addressed
HM Government
Not Addressed
This government recognises that climate change and population growth has an impact on insurance. This is why we have committed to reviewing, by the end of this Parliament, whether a return to price reflective market from 2039 remains viable. The review will consider how both the government and the industry have responded to new challenges, and whether this means that the insurance market can and will enable access to affordable flood insurance from 2039 without ongoing government intervention. The review will explore opportunities and challenges that support household resilience, promote a fair and risk-reflective insurance market, and ensure that flood insurance remains accessible and affordable for those who need it. It will include consideration of extending the Flood Re Scheme and alternative approaches if needed. Recommendation at paragraph 129: ‘By the end of 2025, the Government should consult with insurers and stakeholders on strengthening the role of insurance in flood resilience. This should include promoting and simplifying access to the Build Back Better scheme. The Government should support the development and piloting of Flood Performance Certificates (FPCs) as a voluntary tool to improve awareness of property flood risk and resilience. FPCs should be introduced initially on a voluntary basis, with Government support. FPCs should be piloted in high-risk areas with a clear, trusted methodology for assessing resilience, in partnership with local authorities, insurers and estate agents, and they should be free or subsidised for low-income households. Following evaluation of the pilot, the Government should consider how to expand FPCs more widely. Objectives could include minimising the risk that homeowners are penalised for factors beyond their control and reducing the likelihood that properties become difficult to sell or insure due to flood risk.’