Consider two municipal offices located side by side: both of three storeys, brick built from the ground floor up. The first has implemented resilience measures - ground level waterproof flooring, plug points mounted higher and replaceable plasterboard walls. It has non-return airbricks and drain valves. Key equipment is located on the upper floors. The second is built like any ordinary office block, with no particular care taken to address flood risk or resilience. The downtime and cost associated with restoring normal operations at the second site will vastly exceed that at the first.
The difference can be dramatic: I have had clients move from multi-month claims to over-the-weekend clean-ups thanks to this approach, consequently impacting on their ability to deliver their services effectively in fraught times.
However, for parts of the UK like Hebden and Sowerby Bridge, disruption has been so frequent that, no sooner has one clean-up finished, another begins. These places have been learning to live with water for a number of years. The painful cycle of loss, claim, adjustment and repair (and then trying to find insurance again) is a time consuming and draining experience that rarely has a happy ending.
That is why experts in the field of flooding have begun looking at what living with water means for UK property management. The idea of resistance - keeping water out - is not practical after a certain point. So the question becomes: how can we let water into a property, and out again, with minimal damage? If a property has high resistance and high recoverability, then it can be said to be truly resilient. But what actions can be taken to achieve this resilience?
- The biggest take away from this article is: if your property floods, and requires an insurer-funded refurbishment, you can push your insurer to conduct a flood resilience survey and deliver a Code-compliant standard of reinstatement. A new Code of Practice for Flood Resilience, released by DEFRA this year, aims to make repairing flooded properties to a resilient standard easier and cheaper, whilst detailing that it is no longer down to property owners to research and reinvent the necessary resilience measures.
- As compliance with the Code of Practice will have a positive impact on your uptime and future insurability, it is also beneficial to embed its practices into your own rolling refurbishment programmes, saving you time, money and frustration.
- Another relatively affordable measure is the development of a property-level Flood Emergency Response Plan, or FERP. These documents can dramatically reduce claim costs and site downtime by triggering the right actions at the right time. The three key characteristics of a good FERP are: ongoing monitoring and clear triggers for action, accountability for undertaking those actions, and widespread knowledge on what the plan is and confidence that it has been tested.
- Where there is disagreement on risk interpretation, many of our clients are taking advantage of innovative new risk transfer options such as instant pay-out parametric insurance, with the insurer paying out an agreed sum if a certain depth of water is reached. It leaves the insured free to obtain traditional insurance for lower risk parts of its portfolio, achieving adequate overall protection.
- Due to climate change, the most risky sites today may not be the most risky tomorrow. Leveraging insights from climate-change-conditioned catastrophe models can help optimise ongoing refurbishment plans and decide the best course of action for assets. In some cases, this can be funded by the insurer as a bursary arrangement, making it effectively free at the point of use for the insured.
This winter’s storms will eventually abate. Many will be tempted to sweep up the debris, count the costs and leave it at that, attempting to return to business-as-usual. But unfortunately, flooding is increasingly becoming business-as-usual: the sooner we adapt to it, the more resilient we will be, the more we will save and the fewer sleepless nights there will be for us all.
Dr Bev Adams is Global Head of Catastrophe Resilience at Marsh, the brokerage and risk advisory firm, and a member of DEFRA’s Property Flood Resilience Roundtable. The Code of Practice for Property Flood Resilience can be downloaded at www.ciria.org/copforpfr.