PART six OF OUR 10TH ANNIVERSARY INTERVIEW SERIEs
As we move forward as an industry, Jill Boulton, Insurance Specialist at JBA Risk Management comments on the importance of insurers, data providers, regulators, lenders and government bodies working together to overcome the challenges ahead, from climate change to property risk.
To say that flood insurance has played a significant role in my working life is a bit of an understatement. Before I joined JBA back in 2007, I had already spent 16 years at Aviva during which time I created the first national river flood map for Great Britain. My colleagues back then referred to me as the Queen of Flood!
But beyond the technical challenges of getting to grips with flood risk, a main focus of my passion has always come from understanding the breadth and variety of requirements from clients within the insurance industry.
Even now, after countless conversations with different clients, it’s the ability to help insurers access and understand, the science-based data and flood insights in a practical and useful way, that feels most important to me. We now work with almost 90% of UK insurers – and with no two insurers have the same systems – which is why JBA offer training and guidance to ensure the data is useable and works within a client’s own processes.
It is this spirit of partnership, of collaboration, support and data sharing that is, I believe, going to be increasingly essential as we all look to face the challenges ahead.
There is no doubt that flooding will be more severe and more frequent in future, impacting ever more properties. It is also clear that neither our housing stock nor our businesses are particularly well prepared for this changing climate, exacerbated by continued building on flood plains and rising urbanisation.
But the challenge is not just about the future. Considering the number of properties in the UK that have already flooded more than once and are still at significant flood risk today, it is fair to say that parts of the UK are not even prepared for the current risks from flooding.
For insurers (and investors and lenders), understanding and planning for an uncertain future is challenging. At a basic level, insurers need to be able to work out how much to charge for the same risk in the future – and how long to wait before moving rates upwards (or even downwards in some areas).
They also need insights into whether to pull out of some property lines altogether or embrace new products such as parametric insurance, as well as to understand what adaptions to properties would actually lessen the risks.
Helping clients understand uncertainty is, however, at the core of what we do. And our suite of data-rich and increasingly automated and flexible products is already helping insurers, and lenders, to consider the likely scenarios for their books of business, both in the short term and the much longer-term.
And in addition, we are also helping them meet the different regulatory demands.
We have seen the PRA in the UK introduce climate change stress test requirements and the EU will follow suit later this year. Going forward, our systems will allow us to provide views of risk for a range of climate change scenarios for anywhere in the world, not just in the UK, enabling our customers to assess their risks and assets globally and match their individual needs.
There is a lot we don’t know about what the future has in store but what we do know for certain is that we all need to anticipate and understand the impact of the changing climate and address those challenges.
To do that we need to harness and process the growing amount of data and ensure that we can work with it effectively, so the information delivered is timely, relevant, and useful. The more relevant data we can access, the more appropriate and useful our output can be.
The Environment Agency is making more of its information available, but many organisations are lagging behind. For example, there is lots of data presently locked up within various housing stock databases that could help insurers understand the repair and rebuild costs for flooded properties, potentially improving the availability of cover. We need the Government to use its influence to help accelerate the wider sharing of data – and of course to ensure that we stop building tens of thousands of properties on flood plains.
We are living in an increasingly uncertain world from pandemics through to climate change and we all need to pull together.
At JBA Risk Management we will continue to push forward, to invest in our technology, in our people and in new data sources to ensure we can help our clients and their customers navigate, and plan, as best as possible for the future.
This is part six of a series of interviews with the JBA team over the coming weeks. Read the rest of the series here.
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