The floods of Summer 2007: 10 years on

Whilst the UK has been enjoying very hot temperatures recently, 10 years ago it was a different story.

The Summer of 2007 was the wettest since rainfall records began in 1766.  Heavy rain triggered two extreme rainfall events; on 25th June and again on July 20th.  The Met Office reported that from May through to July 2007 more than 387mm of rain fell across England and Wales which is double the average for the period. Despite a relatively dry April, by mid-June the ground was saturated and low sunshine levels meant that there was little evaporation.

On 25th June, intense rainfall led to severe flooding in parts of the North East including Sheffield, Doncaster and Hull; areas in which the level of penetration of insurance is low compared to other parts of the UK.  In Hull, over 6,000 properties were flooded and more than 10,500 homes evacuated as flash flooding led to drainage and sewage systems being overwhelmed.  The flooding caused major disruption to homes and businesses with almost half a million people without a water supply for up to 3 weeks and left many residents unable to return to their homes for up to a year.

More heavy rain on July 20th caused flooding in many parts of England and Wales with some areas hit particularly bad such as Gloucestershire, Cambridgeshire, Wiltshire, Hampshire and Oxfordshire where properties were flooded for the second time in less than a month.

 The impact on the insurance industry

The Environment Agency (EA) estimated the total costs of the 2007 floods to be £4 billion.  Around £3 billion of this loss was covered by insurance, making this one of the costliest events to date for the UK insurance industry.   In terms of insurance claims, the ABI reported around 165,000 claims with 132,000 of those claims for damage to domestic households.   Thankfully this was a rare event and believed to be somewhere between a one in 500 years and a one in a 1000 years event. This estimate though is very much a guess given the amount of data used to base this estimate on and with a changing climate calling into question the assumptions underpinning the analysis.

How flood risk mapping has changed since 2007

Whilst it is not unusual for the UK to experience extreme rainfall in the Summer, a much higher proportion of the flooding of Summer of 2007 was due to surface water flooding rather than any other type of flood risk (e.g. river flooding). By its very nature, surface water flooding is very localised and is caused by large volumes of rain water, making it very difficult to accurately predict exactly where flooding will occur geographically.

At the time, there were no surface water flood maps and insurers did not factor it into their ratings.  Today over 3 million properties are estimated to be at risk of surface water flooding in the UK.

Following the 2007 floods, the Pitt Review found that work was needed to improve the management of flooding from surface water and poor drainage.  It also identified the need for surface water flood maps for England and Wales. Subsequently, JBA Consulting developed the first nationally produced model of surface water flooding to supply to the EA.

The Flood Map for Surface Water (FMfSW) in England and Wales was developed in 2009 and included:

  • an additional rainfall probability
  • the influence of buildings
  • reduction of effective rainfall through taking account of drainage and infiltration
  • a better digital terrain model that incorporated the Environment Agency’s high-quality LIDAR data.

In 2013, an updated Flood Map for Surface Water (uFMfSW) was produced.  The new surface water flood map for England and Wales shows the worst-case flood extents, depths, velocities and hazard ratings for the 30, 100 and 1,000-year return period storm events of one, three and six-hour durations.

The EA maps were not intended to be used for insurance purposes to assess the risk to a particular property but were intended to provide an indication of whether your area may be affected by surface water flooding and to what extent.

Lessons learned for the future?

Recent flooding events have revealed the UK’s vulnerability to extreme rainfall events.  Peter Stott, Head of the Met Office’s climate monitoring and attribution team, believes there is strong evidence that extreme rainfall events are increasing and are likely to become more frequent in future years.

The general scientific consensus is, however, that the summer 2007 floods were not a “climate change event” but rather were a consequence of a combination of unusual (but normal) events such as prolonged heavy rainfall and saturated soil which made it unable to absorb the additional rainfall.

One thing that is clear is that this problem is not going away anytime soon. The NFRR (National Flood Resilience Review) concluded in September 2016 that it was plausible that rainfall experienced over the next ten years could be between 20% and 30% higher than normal.

Insurers are ensuring they are better equipped to deal with the impact of extreme weather events by using data models that are based on up-to-date information and that take account of changing risk patterns to better predict, assess and monitor risk. However, this is not just an insurance issue; it involves government, house builders, local authorities and insurers all working together to ensure the UK becomes more resilient to flooding. With a changing climate and potentially more frequent and more severe flood events in the future, we need to make sure that we take action considering what could happen – failure to adapt is not an option.

Current research indicates that if we are not able to control the average rise in global temperatures then we will subsequently see a significant increase in the risk of flooding. For example, failure to constrain average global temperature rises to within 4 degrees will see the overall risk of UK flooding increase by 150%. It’s a problem that won’t go away and one that needs to be addressed now, not after the next cluster of events.


Flood, building on flood plains and the profile of those at risk

It is estimated that there are currently 1 in 6 properties or 4.7 million properties in Great Britain at risk from flooding, with 2.7 million properties at risk from flooding from rivers and sea alone.  Between 2001 and 2011, around 200,000 new homes were built on land that has a significant chance of flooding, either from a river or the sea. During the 1990s, this figure was even higher as there was less focus on flood and no obligation on planners to carry an analysis of flood risk at the time.

After the devastating effects of last winter’s storms and the subsequent costs to the insurance industry, building residential properties on flood plains continues although admittedly not in the same volumes.

Recent figures obtained by the i newspaper under the Freedom of Information Act show permission has been given to build more than 1,200 new homes on flood plains despite official objections from the Environment Agency about the risk of flooding on such sites. With all the publicity and available data relating to flood risk, it does seem slightly unbelievable that construction even at these levels is allowed to proceed, or at least without an obligation on builders to ensure that properties are built to be flood resilient.

New housing built in areas thought to be protected by flood defences may also be more at risk than first thought. Flood defences are built to withstand a certain magnitude of event, e.g. a flood with an estimated return period of 1 in 200 years, yet the underlying techniques modelled from relatively small data samples are based on extreme value theory which is sensitive to the underlying assumptions. I know there are still some people in senior roles in the world that are sceptical about climate change, however it does undermine the accuracy of these models and mean that defences may be more vulnerable than when first built or constructed. A good recent example being in Carlisle which flooded in 2005 (1925 homes and businesses) with flood defences that were breached. The defences were improved at a cost of £38 million yet these failed again in 2015 following a more extreme event than had been considered in the planning.

Profiling those areas hardest hit by flooding
We used our geodemographic risk profiling tool Resonate© to analyse the demographic profile of those affected by the Winter floods in 2015 in Carlisle and areas of Cumbria.   Our analysis revealed that there was an over-representation of properties flooded from working class and disadvantaged rural areas across the distribution of those hit.

Further analysis of these areas revealed a large number of properties flooded were from the Resonate lifestyle group ‘Rural & Village Survivors’ and those worst affected were predominantly from ‘Blue Collar Heartlands’; which are characterised by blue-collar workers in pre-war terraced properties where the proportion of terraced properties is almost thirteen times the UK average percentage. There is a high proportion of this type of neighbourhood in Carlisle.

Looking at all the areas across the UK that have a high risk of flooding does reveal that there is an over-representation of older, disadvantaged and more vulnerable neighbourhoods. In the future, we will no doubt continue to see more occurrences similar to that of Carlisle with poorer and more deprived neighbourhoods being disproportionately hit.

As long as there is still a demand for new houses, building on flood plains will continue. There is an increased demand for new housing particularly in the South East in areas where flood defences do exist, though climate change may limit the level of protection envisaged when some of these defences were built. A geodemographic analysis of the make up of the high-risk flood areas is quite startling – higher volumes of older, more disadvantaged and more vulnerable members of society dominate.

This highlights the important role that insurance plays and how the availability of affordable flood insurance for everyone is essential.  The introduction of Flood Re goes some way towards offering flood-prone properties a degree of cover but does not yet guarantee affordable insurance for everyone. The Government will need to put more investment in maintaining and improving flood defences and will need to look at helping make properties in the highest risk areas more resilient to damage from flooding.

Winter Storms and the proposed ‘flood tax’

flood squareThe Government’s plan to increase council tax for those householders in areas already hit by severe flooding will affect those on low incomes and the socially vulnerable the most.

Analysis by Business Insight using our demographic risk profiling system RESONATE© showed that the proposed ‘flood tax’ will affect predominantly older, disadvantaged and more vulnerable communities. 

Closer inspection of the demographic profile of those affected by the Winter floods revealed that there was an over representation of properties flooded from working class and disadvantaged rural areas such as Carlisle.  Characteristics of these groups include struggling families on modest incomes and rural areas with a high proportion of elderly people over retirement age.   The penetration of insurance amongst these groups is also not as high as other demographic types.

Many homeowners in these areas affected are facing huge clean up bills and a disproportionate number of low income households are without insurance altogether making them even less able to recover from the financial impacts of the Winter floods.   The recent floods have highlighted the importance of the availability of flood insurance and the vital role it plays in society as a safety net.

The planned imposition of additional council taxes on homeowners is, we believe, grossly unfair and likely to cause further distress in areas that have suffered enough.

Why weather data matters

The insurance industry has been incorporating historical weather patterns into underwriting and pricing models for years.

How far back do weather records go? The Met Office uses 1914 as the official start of the records of weather data as this was when observation stations became more uniform in the way they collect data but they do have records dating back to c1200.

The England and Wales Precipitation series, which measures rainfall and snow, goes back to 1766.  Some weather stations have been collecting data since the 1800s.  We asked our colleagues at Weathernet for a copy of the first weather entry they have and the earliest entry they have dates back to 11th March 1872.


Information on rivers and peak flows has only been collected for decades rather than centuries and the first surface water yearbooks were published in the 1930s by the Inland Water Survey.

There are a number of challenges in identifying trends in the frequency and severity of extreme weather events and these include the relatively small amount of historical data available.

If we only have reliable records for the last 100 years or so, should we be concerned about our capability to understand and forecast extreme weather events like those of the recent December floods?

The rainfall in December produced a new record of 341.4mm at the Honister Pass rain gauge, Cumbria which was more rainfall in a day than an average month. This has been estimated at over a one in a 1,000 year event.  However, we keep seeing records broken so clearly a more accurate assessment of the return period or frequency of extreme events is required.

We also need to have accurate estimates of extreme weather, particularly rainfall, to ensure the right level of investment is put into the design of flood defences. In the recent flooding in Carlise, defences built to withstand events up to a 200 year return period failed.  This is only 10 years on from the previous flood event and after a £45m investment in a new flood defence scheme.

So is climate change a factor?
There has been an increase in storminess in recent years and we do seem to be in a flood rich era.  Many scientists accept that climate change is a contributing factor to the pattern of weather we have been experiencing in recent years.  A recent study by Oxford University and the Royal Netherlands Meteorological Institute has calculated that climate change has made the recent flooding events 40% more likely.

So in summary, weather data is really important in understanding, validating and helping us to assess natural perils risk.  There are a lot of really useful risk models and data sources that can give a detailed insight into weather-related risk, particularly flooding.  However, we still have someway to go in getting a fuller understanding of more extreme events, how they will impact us going forward and what role climate change has to play in all this.


More misery for homeowners in flood risk areas

floodWith many parts of the UK still being battered by storms, the Government’s plan to increase council tax bills in areas already hit by severe flooding is not proving popular.

Analysis by Business Insight using the demographic risk profiling system RESONATE© shows that this policy will hit predominantly older, disadvantaged and more vulnerable communities.

People in these areas are already facing huge clean up bills and this regressive form of taxation will impact those who can ill afford it the most.

Read press release here: Press release 040216 More misery for homeowners in flood risk areas


How insurers can assess flood risk more accurately

The impact of Storm Desmond on the 4th and 5th December 2015 with gale force winds and unprecedented rainfall has resulted in severe flooding in Cumbria and the North of England. UK insurers will be faced with a large bill as a result with initial market loss estimates being put at up to £500 million.

The bad news for insurers is that these extreme weather events are not going to go away.  With around 5,200 residential properties flooded, the estimated bill to the insurance industry in terms of household claims is thought to be around £174 million.  Every model that has been produced indicates that we are going to be experiencing more severe weather conditions in the future.  So what can insurers do to mitigate their flood risk exposure?

Property risk in the insurance industry depends on a range of factors linked to the physical location. The local environment, the types and construction of buildings, local crime rates, the demographic make-up of the population, physical hazards such as flooding, storm or extreme cold weather – all need to be considered when assessing each risk.

There have been some significant developments over the last few years in terms of the data and tools available and insurance companies are now able to make insightful decisions based on reliable data and risk mapping software.   Things have moved on from rating at the level of postcodes to using more sophisticated methods which allows rating at an individual address level for risks, enabling insurers to understand their exposure to a much greater depth.

Business Insight’s risk mapping tool, Location Matters©, combines state-of-the-art risk mapping technology with the best of breed perils and geodemographic data to provide insurers with a powerful insight and a deeper understanding of geographic risk and the make-up of the local area.

It is the only mapping software designed specifically for the insurance industry that features a complete set of best of breed perils risk models including the market leading Business Insight data models for the UK property insurance market and JBA Flood data.

Location Matters© provides today’s insurance professional with the highest resolution data to give them a greater insight to risk, help drive a more profitable risk selection and improve exposure management through insight into accumulations of risk across their book of business.  It can also be used post an event within Claims Departments to assess the validity of individual claims and for better allocation of resources.

We are still learning about the future implications of climate change, but one thing seems certain – weather conditions look unlikely to stabilise.  The potential influence of climate change cannot be ignored as even small increases in the frequency and severity of events can translate in to significant numbers of claims.

So it is more important than ever for insurers to invest in technology and data models that are based on up-to-date, reliable information that take in to account changing risk patterns to gain a deeper insight into risk.

Find out more about Location Matters© here.