Insurer chief warns England is building homes flood risk could make uninsurable

Amanda Blanc, the boss of the insurance giant Aviva, has warned that homes being built today could become uninsurable in years to come as the risk of flooding rises sharply, warning the country cannot keep adding properties in areas already known to be prone to flooding.

Speaking to the BBC's Big Boss Interview podcast, Blanc said the danger of flooding was "absolutely increasing", and that on current building patterns roughly 115,000 new homes will be constructed in flood zones over the next decade. That, she said, simply did not make sense, adding that planners and policymakers needed to reconsider exactly where homes are being approved.

Asked whether England was already building properties that might one day be impossible to insure, Blanc answered emphatically. She said the country was "for sure" doing so, pointing out that the locations of flood-prone areas are already very well documented and understood. Her argument was that those maps should shape future development decisions rather than be ignored or discovered only after homes have been built.

She also raised a second, subtler problem: properties constructed on the edges of flood zones, or bordering them, can still be badly affected, and the approach to building in those locations has to change. Blanc noted that a great deal can be done to a property to make it either more or less exposed to floodwater — through design, materials and construction choices — rather than treating vulnerability as fixed.

The scale of the underlying exposure is significant. According to the Environment Agency, about 6.3 million homes and businesses in England are at risk of flooding. Aviva's own research adds a sharper recent picture, finding that one in nine homes built between 2022 and 2024 are already at medium to high risk of flooding.

Looking further ahead, Aviva's analysis suggests the problem compounds. Nearly a third of the new homes built in 2024 are expected to face some level of flood risk by 2050, while one in seven would fall into the medium to high risk category, as extreme weather becomes more acute. Those projections assume current trends in both climate and building continue unchanged.

The climate backdrop to those figures has already shifted. Earlier this year, the Met Office estimated that with current levels of global warming, record-breaking wet winters like the one the UK experienced in 2023-24 have moved from being once-in-80-year events to once-in-20-year events. That is a marked shortening of the timescale insurers and mortgage lenders are working with when they model long-term risk.

The warnings are not theoretical. Homes in Loughborough were hit by flooding in January last year, with water reaching doorways in residential streets. The BBC has approached the government for comment.

Beyond flooding, Blanc used the wide-ranging interview to press for caution on economic policy generally, urging the government to avoid "kite flying" in the run-up to Chancellor John Healey's first Budget on 28 October. Her concern was less about any single measure than about the effect repeated speculation has on households' long-term financial decisions.

Aviva is one of the major private pension providers in the UK, and Blanc said speculation during the last couple of Budgets about potential changes to pensions produced a sharp rise in withdrawals. In the past year, she said, the firm saw 30 times the normal level of pension withdrawals. She warned that customers may come to regret this, since once a tax-free lump sum has been taken it cannot be put back.

So far, the announcements ahead of the Budget have been relatively limited, including a scheme designed to help first-time buyers get onto the property ladder and a commitment from Healey to deliver a "new age of industrialisation" for the UK.

On investment, Blanc said Aviva was "ready with capital" to put into UK infrastructure. The company already invests more than £100bn in the UK, she said, of which about £35bn goes into infrastructure ranging from hospitals and schools to windfarms. She argued this capital can deliver good returns for pension holders and scheme members, while acknowledging that more detail is needed before that becomes reality.

Blanc was also questioned about the ongoing debate over the pension triple lock, under which the state pension rises by the highest of average earnings growth, inflation or 2.5%. She said it was not her place to dictate what the government should do, but she flagged the knock-on effects if annual increases were reduced: lower state pension provision would mean people needed higher private provision instead, so the balance between the two has to be thought through carefully.

Taken together, her comments point to a mounting pressure on one of the UK's largest homegrown industries. Insurers price flood risk into premiums, and as risk rises the cost of cover goes up, or cover becomes harder to obtain altogether. For householders buying with a mortgage, that intersection of insurance and lending is where a difficult conversation is likely to develop if homes are built today in a form that cannot be insured tomorrow.

Blanc's central message is one of sequencing. Risk is already known and mapped, she argues, and the decisions being taken now about where and how to build will determine whether those properties remain insurable for the decades they need to last. Her request is correspondingly simple — think very carefully about where homes are being built, design them properly against flood risk, and avoid pre-Budget trial balloons that push households into decisions they cannot easily reverse.