The City of London – a roughly one square mile area along the north bank of the Thames – is the heart of the UK’s financial and insurance industries. So when Aon warned that the area is at risk from flood threats, which could lead to limits on policies covering the peril, it does not go unnoticed.
An article on the Lloyd’s web site (www.lloyds.com) reveals the “leading insurers are considering removing the City of London from their flood cover policies if the government does not start investigating in adequate flood defenses.
Aon’s warning cites the threat of “heavy rain this summer coupled with insufficient flood protection systems,” which could “potentially see the city becoming an uninsurable region.”
The problem, according to Lloyd’s, is not so much with the City itself, which is outside of the highest risk areas, but with “key transport links – trains, tubes and buses, as all of these run through “high flood risk zones south of the Thames which could grind the city to a halt.”
Aon has joined forces with the City Property Association (CPA) to urge London’s newly elected mayor, Boris Johnson, to take action against the threat.
Bill Gloyn, Chairman of real estate Europe at Aon Mergers & Acquisitions Group and recently elected President of the CPA, stated: “Naturally, the mayor has focused on the vote attracting issues of crime, affordable housing and the environment, but a major flood would affect thousands of homes and could bring our financial center to a standstill through the lack of transportation.”
Gloyn called for the mayor to pay serious attention to potential flood threats, and urged additional investment in “the flood defense infrastructure that protects our capital.” He warned that disruptions in the City could “be exploited by other cities keen to undermine the supremacy of London as the world’s leading financial center. Any major flood in central London would be disastrous for not only the city but for the UK economy as a whole.”
The Environment Agency are clearly aware of the potential damage that the UK would face from another year of disastrous flooding, so proposals to prevent this have been put into place through the agency’s white paper, ‘Thames Estuary 2100’. It states that flood management options for the city may include some scope for the set back of defenses, sustainable urban drainage and increasing the use of the Thames Barrier. *
Darren Johnson, Green Party Member and Chair of the Environment Committee added: “Ensuring that there is adequate flood protection in London is a matter of great significance. East London is not protected by the Thames Barrier which does raise concerns. What we need to do is avoid building on high risk areas, like Thames Gateway and protect these flood plains that are being built on.”
He also noted: “The impact of climate change is having an increasing affect us so rather than constructing more concrete buildings to deal with the threat of flooding, a natural drainage system would be better for the city. There is a real need for green open spaces so this way we would kill two birds with one stone. If there were major flooding in central London it would have a catastrophic effect on public transport which cost the capital billions of pounds.
“The new mayor, Boris Johnson will have to take a long hard look at Thames Gateway, to make sure that proper attention is paid to this area. It is clear that something needs to be done but at this stage we don’t know where the money will come from. We know what solutions are needed but what we don’t want is years of arguing with reference to who will pay for it and it never gets done.
“We are still in the process of a series of different consultations which have yet to become formalized but it is absolutely crucial that something gets done.”
Source: Lloyd’s
* The Thames is a tidal river, which rises and falls twice a day by an average of seven meters (22 feet); The Thames barrier was constructed between 1974 and 1984 to modulate extreme high tides and tidal surges caused by storms. It is not in operation full time, but has been used more than 100 times since its construction. Studies are now under way to strengthen the barrier, as sea levels rise and more powerful storms occur.
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