A Message of Virtuous Hope
Flooding has been around with us for as long as history recalls, and likely before that time too. The big one apparently happened at the time of Noah when folklore says you couldn’t even see the hills. Desperate times call for desperate measures. Noah sent out a dove in search of land that came back with an olive twig bearing hope for everybody with flooding problems. We’re delighted to hear that Marsh and Guy Carpenter just did the same.
Two issues have been bedevilling the British property insurance industry since the Statement of Principles began winding down. Politicians want to stick to flood defences. Insurers are unwilling to take on excessive risk, without some sort of financial underpinning by the government
This has all come together neatly in what Marsh and Guy Carpenter call their “Project Noah”. At the heart of this is a capability to calculate the flood risk of every single property in the UK and to re-insure it on that basis. It’s enabled by Landmark Information Group’s digital mapping and land data intelligence power.
The insurance pool this generates will enable UK insurers to re-insure their flood risk elsewhere on the globe. Marsh UK’s head of flood risk Hutton Swinglehurst has gone on record saying “We have tested Project Noah with some of the UK’s largest insurers, as well as leading global re-insurers, who believe that this state-of-art model provides an innovative solution to an intractable problem”.
Donald Macdonald, head of UK property at Guy Carpenter adds that the project will create a “virtuous circle as increasing numbers of companies getting involved in the pool [would] make risks more predictable which would in turn bring down prices”.
This is great news for everybody. The government will benefit from quality input as to where it should be directing its flood defence spend. Insurers will now be able to assist flood-prone homeowners who otherwise represent an attractive market to them. And homeowners will themselves sleep more peacefully at night, even when the rain comes pelting down upon their homes as if they were living in Noah’s time.
We applaud this. We think that it’s a well-engineered solution that touches all three bases to create a self-sustaining triangle. The only thing that’s puzzling our Auger engineering boffins, is why this took so long to get this far.