Flood warning for insurance firms

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The insurance industry should think again about offering policies for new developments on flood plains, according to Flood Risk Management Wales (FRMW).

The committee, which oversees efforts to combat flooding in Wales, is also calling on councils to stop building on riverside land prone to floods.

It is meeting with the Association of British Insurers in Cardiff on Friday, as it highlights challenges for 2008.

Those include the risks posed by climate change and rising sea levels.

Geraint Davies, the chairman of FRMW, said 500,000 people across Wales were at risk of flooding.

He said: "Seventy per cent of people in Wales live on the coast, and that means that climate change and rising tide levels is a real challenge.

"Also, given the geography of Wales, with its steep, sharp valleys, we are prone to flash flooding."

Why is it that the industry is offering insurance on new developments being built on flood plains? Geraint Davies, FRMW chairman

The FRMW brings together flood experts, local councils, the Welsh Assembly Government and the Environment Agency, advising how to spend £30m a year bolstering flood defences.

"But we can't combat the problem of climate change with investment alone," said Mr Davies.

"We want local councils in Wales to stop building on flood plains, and we want the insurance industry to play their part too."

Summer floods

As part of FRMW's first meeting of 2008, they will be asking what lessons can be learned in Wales after the floods of summer 2007, and seeking views of the insurance industry.

"What the insurance industry said after the summer floods was that they had incurred costs of £3bn," said Mr Davies.

"Their reflex reaction to that is to demand more and more flood defences.

"What we are saying is we should be sharing the risk.

"Why is it that the industry is offering insurance on new developments being built on flood plains?"

Mr Davies argued that by offering insurance on such projects, it encouraged both local authorities and developers to promote those schemes.

"We are saying: 'You are part of the problem'," added Mr Davies.