Aviva’s CEO, Amanda Blanc, has cautioned that thousands of newly built homes across the UK could struggle to obtain insurance going forward, citing escalating flood risk and stressing the importance of urgent re-evaluation of housing development locations.
Flood threats put future UK housing insurance at risk, says Aviva
On the BBC’s Big Boss Interview podcast, Amanda Blanc, Chief Executive of Aviva, expressed her concerns that the UK continues to develop large numbers of new homes in flood-prone areas, with possible consequences for their insurability in the next decade. According to her, if development patterns remain unchanged, the next ten years could see around 115,000 new homes erected within flood zones.
Stressing the issue, Blanc remarked, “That doesn’t seem to me to make sense. We need to think about where those homes are being built,” underlining the necessity of carefully assessing development sites before construction proceeds.
The Environment Agency currently estimates that about 6.3 million homes and businesses throughout England face flood risk. Within Aviva’s own research, it is shown that one in nine newly constructed homes between 2022 and 2024 have a moderate or high flood risk.
Worsening flood risk as climate changes continue
Blanc further mentioned that England is actively contributing to the future stock of homes potentially deemed uninsurable, as flood risks grow. She urged for a review of current building practices, particularly near floodplain boundaries, and highlighted measures property owners can take to reduce or increase their home’s vulnerability to flood.
More findings from Aviva indicate that by 2050, nearly a third of new homes built in 2024 might be at some risk of flooding, while one in seven are projected to reach a medium to high risk classification due to increasingly severe UK weather.
Research by the Met Office earlier this year has found that the probability of extremely wet winters, such as that seen in 2023-2024, has been amplified by present global warming levels. Winters that only occurred every 80 years in the past could now be expected to occur as frequently as every 20 years.
Impacts on government policy and investment
During the interview, Blanc also urged the government to avoid premature “kite flying” or speculative policy suggestions before Chancellor John Healey’s upcoming Budget, scheduled for 28 October. As a substantial private pension provider, Aviva experienced “30 times the normal withdrawal from pensions” following speculation about pension changes during last year’s Budget, which Blanc described as concerning. She added: “Effectively we saw in the last year 30 times the normal withdrawal from pensions that we would normally see, which is clearly something which customers may regret afterwards because once you take your tax-free lump sum out, you can’t put it back in.”
Among the announcements ahead of the Budget are a support scheme for first-time buyers and commitments by Healey to usher in a “new age of industrialisation” throughout the nation.
Blanc pointed out Aviva’s significant position in the UK as a key investor, noting the company’s existing investments exceeding £100bn, including £35bn in infrastructure comprising windfarms, schools, and hospitals. She affirmed that Aviva is “ready with capital” for more investment, but stressed the necessity for consistent government policy to unlock further commitments.
Regarding the ongoing discussions about the pension triple lock—a mechanism linking state pension increases to either inflation, average wage growth, or 2.5%, whichever is highest—Blanc refrained from offering a firm recommendation. She did, however, warn that any decision to slow the rate of state pension growth could heighten reliance on private pensions and urged careful deliberation by policymakers.
Need for rapid action highlighted by recent warnings
The combination of Environment Agency data and Aviva’s research reveals the scale of properties currently at risk, and the prospect of building tens of thousands more could intensify a looming insurance shortfall. Blanc advocated for joint action by government and industry to better plan new housing, implement robust flood management solutions, and deliver certainty in policies for both housing and pension markets amid ongoing climatic changes.