Insurer's chief warns of homes becoming uninsurable as flood risk climbs

Homes being constructed today across England could one day prove impossible to insure because of flood risk, the chief executive of one of Britain's largest insurers has warned. Amanda Blanc, who leads Aviva, said the danger is not a distant prospect but a consequence of decisions being taken now about where new housing is sited.

In an interview with the BBC's Big Boss Interview podcast, recorded by business presenter Sean Farrington and reported alongside by business reporter Rachel Clun, Blanc said the risk of flooding was "absolutely increasing". Her warning was blunt: England was "for sure" building properties that may become uninsurable at some point in the future.

Her criticism centres on planning decisions taken in areas already known to be vulnerable. On current building patterns, Aviva estimates that 115,000 new homes will be erected in flood zones over the next decade alone. For Blanc, that figure is difficult to defend. She said it did not "seem to make sense" that homes should continue to be built in locations where flood exposure is already well documented, and argued that planners and developers needed to think harder about the geography of new construction rather than treating flood risk as an unfortunate by-product.

The scale of the underlying exposure is significant. The Environment Agency estimates that about 6.3 million homes and businesses in England are at risk of flooding. Aviva's own research adds a more uncomfortable detail for the construction sector: one in nine homes built between 2022 and 2024 is already at medium to high risk of flooding.

Extending the timeline sharpens the picture further. According to Aviva's analysis, close to a third of new homes built in 2024 will face some level of flood risk by 2050, while roughly one in seven of them will be in the medium-to-high risk category as extreme weather becomes more frequent and more severe. Those projections, in turn, are underpinned by the Met Office's assessment earlier this year that, at current levels of global warming, record-breaking wet winters of the kind the UK experienced in 2023-2024 have shifted from being once-in-80-year events to once-in-20-year events.

Blanc said she was not calling for a halt to housebuilding, but she insisted that the approach to risk had to change — including for developments that sit alongside, rather than inside, mapped flood zones. "You can do all sorts of different things to your property to make it more or less vulnerable to flood," she said, pointing to the fact that mitigation and design choices can materially change an individual property's exposure. Her broader point was that flood zones are not a mystery: their locations are already known, and decisions about new homes nearby should reflect that knowledge.

The consequences for households are straightforward. A property that insurers regard as too risky to cover does not simply become more expensive to insure; it can become uninsurable altogether, leaving owners exposed to repair costs with no backstop. Insurance availability is also closely tied to mortgage lending, so a decline in cover can tighten credit availability in the same communities. Flooding is not an abstract risk for insurers alone — it is a question of whether residents can buy a home, obtain a mortgage and, ultimately, sell it.

The timing of Blanc's comments is significant. She urged the government to stop engaging in policy "kite flying" ahead of Chancellor John Healey's first Budget, which is scheduled for 28 October. Only a handful of announcements have been made so far, among them a scheme designed to help first-time buyers get onto the property ladder and Healey's commitment to deliver a "new age of industrialisation" for the UK. She warned against a repeat of recent Budget cycles, when speculation about pension changes produced a surge in customer behaviour that customers may later regret.

On pensions, which are a central concern for Aviva as a major UK private pension provider, Blanc said rumours of change in recent Budgets triggered a dramatic rise in withdrawals. In the last year, the firm saw 30 times the normal volume of pension withdrawals — activity she described as something customers may come to regret, because a tax-free lump sum, once taken, cannot be put back into a pension. Her message to policymakers was to be "very, very thoughtful" about experiments and trials, since the reputational and financial costs to savers can outlast any political cycle.

Asked about the continuing debate over the pension triple lock — the rule under which the state pension rises by whichever is highest of average wage growth, inflation, or 2.5% — Blanc declined to say what should happen to it, arguing it was not her place to dictate policy. She did, however, flag the knock-on effects. If state pension growth were to be reduced, she said, the gap would need to be filled by private provision: "If you've got a lower state pension then you need a higher private pension, don't you? So you need to think about that balance."

On investment, Blanc said Aviva was "ready with capital" to pour into UK infrastructure. The company already invests more than £100bn in the UK, of which £35bn goes into infrastructure including hospitals, schools and windfarms. She stressed that such investment provides good returns for pension holders and scheme members, while acknowledging that detail is needed to convert that willingness into delivery.

The BBC has approached the government for comment. Images of homes in Loughborough hit by flooding in January last year underline the human stakes of a debate that is, until now, being conducted largely in the language of actuarial tables — but which, for many homeowners, is already a question of whether the future value of their property can be protected at all.