By Heikki Vesanto, GIS Manager, LexisNexis Risk Solutions, UK and Ireland
According to Policy First , the immediate physical damage to property and infrastructure from flooding costs £2.4bn annually, and this is expected to increase to £3.6bn by 2050. This is based on Environment Agency projections, which estimate a 27% increase in at-risk properties due to future changes in rainfall, river flows, high tides and wave conditions. It does not account for any additional development or new investment in flood protection.
Flood defences are currently the main protection from floods, saving households £1.15 billion by mitigating damage each year, according to research by Fathom , commissioned by Flood Re. For every £1 spent on flood defence maintenance, £7 is saved in capital spend . The problem is that many existing barriers were designed to withstand less extreme weather conditions than those we now face. So, while the UK Government has pledged £2.65 billion toward building and reinforcing flood defences to help protect 66,500 homes, that is a tiny fraction of the 6.3 million at risk of flooding. Insurers cannot rely solely on these measures to protect properties.
The Growing Challenge of Flood Defence Failures
Take, for example, the failure of Brechin’s flood defences during Storm Babet in October 2023. The £16 million barrier, built to a height of 3.8 metres for a 1-in-200-year event, was overwhelmed when the river surged to 4.4 metres, causing widespread devastation.
In the village of Wainfleet, Lincolnshire, a defence breach occurred in June 2019 leading to 88 properties being flooded and 1,000 people being evacuated from 580 homes. During the preceding month, rainfall totals were 185% of the long-term average. With single-day rainfall events expected to increase by 14% , the sheer volume of water in extreme storms remains a severe challenge. According to the Met Office, both February and September 2024 saw areas record more than 200% of the average monthly rainfall. In September, some areas of central southern England saw more than 300% of the average rainfall, including Oxfordshire and Bedfordshire .
The Role of Geospatial Intelligence in Flood Risk Assessment
To accurately assess flood risk, insurance providers need to leverage geospatial intelligence data for the individual address they are insuring, at the point of quote using the latest advances in flood scoring. This means considering not only the presence of flood defences, but also differentiating between fluvial (river) and surface water flooding—and critically, understanding where floodwaters will flow during an event.
Traditionally, flood risk assessments begin with an address point. As this suggests, it is a single marker placed roughly within the four walls of a property. While this approach may seem precise compared to post code rating, a single point cannot fully represent the complexities of a building’s flood exposure, especially for larger properties with out-buildings that could be at greater risk of flood than the main building.
The Limitations of Buffer Zones in Risk Assessment
To tackle this problem, some insurance providers will use buffer zones around an address point, extending 10, 15, 20, or 25 metres to gauge flood risk. While this approach has its advantages, it also has some obvious limitations. If the buffer is too large, the risk could be overestimated, potentially leading to unnecessarily high premiums or the customer being declined insurance cover for their home. In contrast, if the buffer is too small, it might miss critical flood risk information, underestimating the true exposure. While buffer zones can provide valuable insights, they may not be the best starting point for flood risk assessment. Instead, a more precise approach begins with building footprints, which account for the entire area covered by insurance - including garages, gardens and outbuildings.
Why Building Footprints Enhance Flood Scoring
Using property footprints provides a more accurate and detailed basis for flood risk evaluation. By analysing the exact shape, size, and location of a building, insurance providers can identify whether any part of the property falls within a flood-prone zone, use elevation data to assess potential flood levels and defence failures and improve flood risk scoring accuracy by factoring in precise property-level data.
The Power of Data Visualisation in Climate Risk Assessment
As climate-related risks increase, individual property-level flood assessment has become essential to help ensure fair and accurate pricing. This doesn’t just apply to flooding but also for other perils like subsidence, fire and windstorms. Geospatial intelligence data at the point of quote allows insurers to assess property risks with greater precision for swift and fair pricing. Geospatial intelligence data visualisation tools developed specifically for the insurance market go further to provide an instant picture of risk accumulation across an entire location and evaluate the impact of a flood event on surrounding properties. At any time of day or night, insurance providers can see how many properties they cover in a given area and assess their exposure in real-time.
Protecting Customers in a Changing Climate
Geospatial intelligence data helps insurance providers to predict the frequency and severity of extreme weather events and refine risk models based on historical data. By integrating building footprints into flood assessments, insurance providers can offer more accurate pricing to customers to help keep homes and businesses protected by growing risks posed by climate change.
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