Global Warming – An Upside for the Insurance Broker

There’s no doubt that global warming is real. There’s a bit of doubt as to how severe the effects will be or what they will be, but not that much. Insurance brokers probably aren’t to blame for global warming though. That’s the joy of working in a non-polluting industry, you simply can’t take the fall for the problem.

However, there’s no end of upside for insurance brokers as one of the effects that is absolutely apparent is the increased risk of flooding. The UK has once again been on the receiving end of severe storm conditions during summer, and the government seems to have been on holiday when the paperwork for new and effective flood defences was being processed.

That means businesses need to turn to someone more effective for flood protection than the government. So in steps the noble broker, they can’t help out when it comes to their clients finding themselves 6 feet under water, but they can help out by ensuring the aftermath isn’t fatal to the business in question.

A National but Random Problem

A Google map of major floods in the UK, shows that problems can arise just about anywhere and there’s no real rhyme or reason (in fact the most severe floods are considered to be 1 in 1,000 year or more events) to them.

The Environment Agency estimates that over 185,000 businesses in the UK are at a real (statistical) risk of flooding. They also say that rain fall levels in Summer are now 20% higher than 100 years ago, and over 20 billion pounds worth of property is jeopardized by this.

That’s a significant amount of risk, and the well prepared broker can offer an early umbrella to their customers. Given the results of our recent investigation into why consumers prefer brokers to direct purchases, there’s no reason that you shouldn’t be hoovering up business based on the threat of flooding.

Identifying Flood Risk Property

A good place to start is the environment agency map, which identifies properties at risk of flooding. You can work with your clients to assess the actual risk, in front of their eyes – to enable sales based on independently verifiable facts.

Of course, even if a customer’s premises aren’t on the map that doesn’t mean the risks are zero, it just means that they are appreciably lower. It’s worth examining some of the maps, that have been speculatively drawn if the current global warming trends continue, of how the UK will look in half a century too. That’s because no-one knows whether or not the current trends governing temperature rises will continue, or reach a point when there’s a significant upturn as the cycle becomes self-sustaining.

No-one should take any satisfaction in the flooding causing misery to so many people in the UK. However, insurance brokers should take pride in the fact that well sourced flood insurance can help relieve that misery for many. In 2013, the map for flood insurance will change all over again when the statement of principles governing the availability of insurance expires. In the interim smart brokers should be making hay, while the rain falls.


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