A joint study by Moody’s RMS, the risk modeling and solutions company, and UK flood reinsurance scheme Flood Re, warns of the limitations of current flood defences in the face of climate change, and calls for the UK to invest further.
The main point put across in the report is that while strengthening flood defences can be effective in offsetting additional losses, in the UK, there are diminishing returns from investment in flood defences beyond a certain level.
What this highlights, according to Moody’s RMS and Flood Re, is the need to bring together this investment with property-level flood resilience measures and strategies to address the management of surface water.
The report focuses on future flooding in two major conurbations exposed to severe flood risk. One is York, which has a dense population and strong defences, and the other Pontypridd, with a lower population and lower standard of defence protection.
The study revealed that York could see £11-20 million of additional losses under a 1-in-50-year flood scenario by 2040 due to climate change. Meanwhile, Pontypridd could see £8-17 million of additional losses under the same scenario.
To conduct the study, the pair considered a severe flood scenario for residential properties in York and Pontypridd using Moody’s RMS’ Industry Exposure Database for the UK Inland Flood HD Model, combined with the UK Inland Flood HD Climate Change Model. It then considered the cost of property damage for the present day, with existing defences as baseline; the impact of a high and low emissions climate pathway on the baseline in 2040, and the impact of increasing flood defence standards of protection under both scenarios.
The findings confirm that climate change will erode existing defence standards of protection (SoP) over the study period and result in significant increases in loss for both locations under both scenarios.
Andy Bord, Chief Executive Officer, Flood Re, commented: “This study clearly shows that whilst the UK needs to continue to invest in its flood defences, this alone is not sufficient to build its resilience to flood in the wake of Climate Change. It is also necessary to fully embrace property-level flood resistance measures and water management strategies. Flood Re will continue its work with the insurance market and government to ensure by the time we exit in 2039, UK housing is more resilient to flooding and householders are still able to obtain affordable insurance.”
Daniel Bernet, Senior Product Manager, Moody’s RMS, said: “The UK is one of the best-defended countries in the world for flood risk, however, climate change presents an enormous challenge to defence infrastructure. Our study clearly shows that whilst investment in flood defences has an important role to play, strengthening the flood defence infrastructure is just one solution amongst multiple adaptation measures that will be required to keep the increase in flood risk driven by climate change at bay.”
