Following the news that negotiations between insurers and MP's have broken down, JLT Speciality warned that although the Statement of Principles has only ever related to residential and SME business, the change in underwriting policy could well flow into other commercial insurance.
Speaking at an RICS flood seminar in York today, Bill Gloyn, partner of European Real Estate at JLT said the inability to get cover will then have repercussions for the local economies of affected areas.
"Ironically, although many areas have had historic problems - Tewksbury for example - many have been created by new developments on flood plains. This has been allowed by the planning regime, despite the serious misgivings of insurers. Those misgivings were countered by the government's assurance that there would be adequate investment in flood defences."
Since the 2010 Comprehensive Spending Review, which cut spending by 8 percent year-on-year, some anticipated schemes have not gone ahead.
Gloyn added: "It is unclear why the Government is failing to support the ABI scheme, which is designed to be cost-neutral over time - just allowing the proposed FloodRe to build up reserves until it can be self-supporting. "
