The FloodFlash annual magazine: the flood problem in Britain

Introducing the 2023 FloodFlash magazine! This year, the magazine is all about our smart sensor and the flood problem it solves. 80% of the world’s flood losses aren’t insured, and the problem is getting worse. With the help of our smart sensor, FloodFlash can provide cover to those at risk from flooding. In the first blog from the magazine, we cover the flood risk in Britain, attitudes towards flood insurance, and take a look at the 2022 floods in focus.

What is the flood risk in Britain?

For our 2022 risk report (see here for the whole report), we collated industry leading data from Ordnance Survey, JBA, and the Environment Agency to understand the threat that flooding poses to UK businesses. We also surveyed 500 financial decision makers either at risk of flooding or worried about the risk of flooding, and 200 insurance brokers to find out what they think about the flood insurance landscape.

How many commercial properties are at risk from flooding?

In Britain, there are around 1.6 million commercial properties. Over a quarter of these have at least a low flood risk. Low risk means a property in a 1,000-year zone. Over an example 20-year occupancy the chance of the property experiencing a flood in one of those years in 1 in 50.

27% of commercial properties in Britain have at least a low flood risk. 18.1% have a moderate risk, while 14.4% have a significant risk.

18.1% have a moderate flood risk. Moderate risk means a property is in a 200-year zone. This might seem like a long time but taken over a 20-year occupancy the chance of flooding in one of those 20 years in 1 in 10.

Finally, 14.4% have a significant flood risk. Significant risk means a property is in a 75-year flood zone. That means modelling suggest a flood will happen at least once in a 75-year period. If you consider a mortgage of 25 years, the chance of flooding during one year in the lifetime of the business is around 1 in 3.

Which sectors are most at risk from flooding?

We found that over half of the British commercial properties at risk are in the retail and industrial categories. Worryingly, of the businesses we surveyed, retail has one of the lowest levels of comprehensive insurance. Only 58% of retail businesses agree they have comprehensive insurance.

Retail, industrial, and office properties account for over 60% of properties with a flood risk.
Retail, manufacturing, wholesaling, and logistics, and office properties are often located in areas with a high flood risk.

Where does the flood risk come from?

A common myth is that flooding is mainly caused by overflowing rivers or storm surges. Many people who live in areas away from a river or coastline believe they are not at risk of flooding. However, with increasing development, surface water flooding is now the biggest flood threat to commercial property in Britain.

More than double the number of properties are at risk from surface water flooding compared to river and coastal flooding combined.

Attitudes towards flood insurance

1. Flood insurance is hard to come by

We asked 500 business owners worried about flooding whether they agreed the following statement ‘It’s difficult to get affordable flood cover for my business property’. Over half agreed or strongly agreed, while only 20% disagreed.

According to our research, the percentage of business owners struggling to get affordable flood cover surpasses the percentage of commercial properties with at least a low flood risk. Increased uncertainty around flood risks is causing many traditional insurers to exclude flood or impose excesses and limits even when there have been no floods in recent history. 

2. Business owners are open to technology

Speed and simplicity topped the list when we asked British business owners what improvements they would most like to see their flood insurance. Technology can help to fill these gaps. Luckily, business owners are open to the idea of technology in insurance.

The FloodFlash sensor helps those  with high flood risk
The FloodFlash smart sensor is at the heart of our rapid claims and affordable premiums. It uses IoT technology to measure water depth at the client’s property.

3. The impact of flooding is significant and varied

When it comes to dealing with the impacts of a flood, clean up and repair are only part of the problem. When we asked businesses the main costs they incurred from recent floods, over a quarter of businesses experienced prolonged business interruption. This is often excluded in insurance policies.

40% of businesses close after flooding

Business in the Community

2022 flood in focus

While statistics are crucial to understanding the scale of the flood problem, they can hide the realities. Flooding affects real people, businesses, and lives.

Last February, Storms Dudley, Eunice, and Franklin hit much of the U.K. on the 16th, 18th, and 20th of February. Rare red weather warnings were issued, and the storms damaged public infrastructure, caused severe travel disruptions, and led to four deaths.

The third storm, Storm Franklin, triggered over 400 flood alerts and flood warnings from the Environment Agency. The most severe warnings were issued across the Midlands and the North of England, leading to the evacuation of many properties in these areas.

Heavy rain raised the water levels significantly in many of the UK’s rivers. The River Mersey in Didsbury saw a 3m rise in a 24-hour period. According to the Association of British Insurers, the storms resulted in around £500m worth of claims.

For an expert view on the causes and impacts of the three February storms, visit JBA’s website.

Storms hit many properties across the UK in 2022, causing flooding
For the first time since the Met Office began naming storms annually in 2015/16, three named storms hit the UK within the space of a week.

Tadcaster Medical Centre: A FloodFlash success story

The Environment Agency reported that 400 properties flooded across the country during Storm Franklin. One of these was Tadcaster Medical Centre on the outskirts of York. It is the only GP surgery in Tadcaster, and it serves many elderly patients in the area.

When Tadcaster flooded in 2000 and 2012, the medical centre avoided any damage. However, prolonged rainfall and rapidly rising rivers led to the surgery flooding on Boxing Day in 2015. As the only surgery in the area, refurbishment and repair took place in stages, taking nearly a year to complete. After the flood, they struggled to get affordable cover from traditional insurers. Many excluded flood completely, whilst others imposed 6-figure excesses.

We were able to provide a solutionfor the medical centre. The centre’s flood resilience measures allowed them to choose higher trigger depths. They used the knowledge from their claim in 2015 to set an appropriate payout value at each trigger depth.

When Storm Franklin hit Tadcaster, the medical centre received their payout within days. As well as removing the stress of the claim process, most importantly, the centre was able to return to providing care to their patients as quickly as possible.

It gave us confidence when we saw the waters rising, that even if it was only a little bit of work we needed to do, we would have the money to do it.

Sarah, Practice Manager, Tadcaster Medical Centre

You can hear from Sarah, days after the flood occurred, below.

If you want to get involved with our annual campaign, get in touch. Follow us on LinkedIn for the latest from the magazine. You can also sign up to our newsletter to hear more about FloodFlash every month.