The evolution of UK flood insurance: incremental change over six decades

Abstract

In this paper, the authors' theorizing shifts away from the catalytic role of the flood itself – or other crises – towards a deeper understanding of the relationship between change and stability, taking the example of UK flood insurance and the agreements – and the implicit policy approaches – between the actors involved: private insurers and the government. The study relies upon in-depth analysis of policy agreements governing flood insurance since the 1960s, and semi-structured interviews with six current or former flood insurance professionals. The important agents of change have been, firstly, threats to existing household insurers from new entrants unencumbered by agreements to insure all comers. Secondly, technological changes have made exposure more explicit and pricing risk both easier and less expensive. The slow pace of change and the relatively stable role of the different actors and coalitions is now clearer. Many windows of opportunity created by major flooding or financial crises have not significantly affected the pace or direction of policy change. The overriding importance of the London location for – and the profitability of – the insurance industry, both to government and to the insurers, explains the extraordinary policy stability described here. This history suggests that the UK may not be a good model for imitation elsewhere.