Affordability and availability of flood insurance

Ongoing monitoring of the insurance market is helpful to measure the extent to which Defra’s policy aim of flood insurance being available and affordable for high risk households and businesses over a transitional period of 25 years is being achieved through Flood Re. Flood Re is a reinsurance vehicle which pools the highest risk household insurance policies and effectively limits the flood risk part of the insurance premium and excess.

To provide a more detailed understanding of the flood insurance market Defra commissioned this survey of the availability and affordability of flood insurance for households, including a comparison between those at risk of flooding and those not at risk. Defra commissioned a baseline survey carried out by JBA consulting in 2013-14 to provide initial data on household insurance and flood risk and experience. 

Ipsos were commissioned to carry out follow up research in 2014-15. The primary aim of this research was to monitor and assess the availability and affordability of insurance for households and small businesses in England, building on the baseline survey. The research with businesses comprised quantitative research carried out via questions inserted in the Small Business Survey run by BIS, and follow-up in-depth interviews with 25 businesses to explore key issues in greater detail.

There were two strands of the research with households:

• An online quantitative survey
  • Two samples were selected, one where addresses had a medium or high risk of flooding (‘at risk’ defined as ‘at risk’ throughout the report) and another where they did not (“control” areas).
  • A random probability sample of households were invited to complete an online survey through a postal mail out to selected addresses.1,083 householders with sole or joint responsibility for making decisions about home insurance in their household participated in the online survey.

• Qualitative telephone interviews
  • Participants in the online survey were asked at the end of the survey if they would like to participate in any further research on the topic of home insurance. This was to explore their experiences in more detail.
  • 25 in-depth interviews were subsequently completed by telephone, with quotas set to ensure that the interviews covered a broad range of participants.

 Similarly there were two strands of research with small businesses:

• A quantitative telephone survey
  • The Small Business Survey (SBS) run by the Department for Business Innovation and Skills (BIS) was used to provide some context about the uptake and availability of insurance for businesses.
  • 2,686 businesses were survey with a boost of 450 bussinesses in flood risk areas.
• Quantitative telephone interviews
  • Small businesses who participated in the SBS telephone survey were asked if they would be willing to participate in further research.
  • 25 in-depth interviews were conducted by telephone, with quotas set to ensure that the interviews covered a broad range of businesses.

Reports

• Download the household report (PDF)
• Download the business report (PDF)