Hurricanes are not a way of life in the UK but extreme weather conditions are becoming common. Remember the storms of 1997 and 1990 which cost insurers billions of pounds and more recently the tornado that hit Birmingham? Rising sea levels and storm-surge heights, increasing seasonal rainfall and intensity are all growing problems.Climate change has become a priority for the UK Government. The Association of British Insurers believes that climate change could increase the annual cost of flooding in the UK almost 15-fold by 2080. As the weather becomes more volatile, this will affect the cost of insurance. In New Orleans, insurers estimate that insured losses will be between $35bn to $40bn. How does this affect us? Many UK insurers have exposure in the region and will have to recoup their losses elsewhere which means higher premiums for customers. It isn’t just those living in affected areas who bear the brunt of the cost of weather damage but the wider economy. In those areas in the UK where the risk of flooding is seen as being just too great, insurance companies may refuse cover or the cost may be so high that no one can afford it. Mortgage lenders will not lend on such a property and those homes will become beyond anyone’s reach. After 9/11, property insurance firms took a $20bn hit. Yet Katrina is likely to be the costliest catastrophe in insurance history. If the UK can learn anything from the tragedy in the US it is that prevention is vital. The Government must take the lead by limiting carbon emissions to reduce the effects of climate change and continue its commitment to coastal and flood defences. There is a shortage in housing but controlling development on flood plains is a must to ensure that flooding does not become more of a problem. The smaller picture is important. Many people have paved over their front gardens to create a driveway and the cumulative impact has been considerable. Local temperatures have risen and the environment is dirtier and the extra pressure on drains has increased the risk of flooding. Individuals also have a role to play. As well as considering the environmental impact their lives have, it is important to ensure they have adequate cover for their homes and possessions. Lenders or brokers can point out the risks but it is up to the individual to take responsibility for protecting their home and family.
Tory leadership candidate Ken Clarke has attacked the FSA, questioning whether the regulator has its costs under control. In a speech to Cass Business School in London, former Chancellor Clarke said there was increasing hostility in the City to the “staggeringly expensive” costs that the FSA creates for the industry. He said this mood has […]
F&C Asset Management is recruiting Jennifer Byron to its UK equities team as associate director, equity research. Byron will focus on consumer staples such as beverages, food producers & processors, and tobacco. She joins from Bank of Ireland Asset Management where she was European equity manager. Byron will now report to F&C head of pan-European […]
The autumn jobs market may be unexpectedly buoyant following a very quiet sum- mer in the run-up to A-day, according to recruitment consultants. Consultants are seeing dem-and from schemes, investment managers and IFAs, with much of this due to A-Day but in the context of renewed market confidence across the board. IPS Financial Services director […]
F&C have announced Alain Grisay is to take over as CEO from Howard Carter in January 2006. Grisay was appointed deputy chief executive in March 2005 and will be guided by Carter until his formal retirement in March 2006.
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