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The devastating floods that have hit the UK in recent months have prompted the country's biggest home insurer to raise premiums by an average of 10%.

Norwich Union is planning to introduce double-digit increases following the natural disasters in June and July which cost the company some £340 million.

Other insurers are expected to follow suit after the flooding left the industry with claims totalling around £4 billion.

A spokeswoman for Aviva, Norwich Union's parent company, said premiums had already been under review but the flooding was a "significant" factor in driving up prices.
She said: "It will be an average of 10% for household customers.

"There are a number of issues, of which the floods have been the most significant. They are significant events but not the whole picture - there are other factors that come into it."

But a spokesman for leading insurer Lloyds TSB said it was too early to assess the effects of the flooding, and its priority was to help its customers before looking at the impact of the disaster.
Norwich Union said earlier that the recent floods in Gloucestershire and the South would cost it £165 million.

This is in addition to the £175 million it will pay out for the floods in the north of England during June.

Igal Mayer, chief executive of Norwich Union Insurance, said: "Having visited Gloucestershire myself, I've witnessed at first hand the traumatic and emotional impact the floods have had on our customers.

"We're bringing in additional contractors and specialist equipment to ensure repairs are carried out as quickly as possible, and we're in discussions with local authorities to find the best solution to providing temporary accommodation for those who have had to leave their homes.
"We will continue to do everything we can to help our customers affected by these devastating events return to normal as soon as possible."

James Harrison, chief executive of premium comparison website Insurancewide, said he expected other insurers to follow Norwich Union's lead in raising premiums.

He told BBC Radio 4's Today programme: "Normally what happens when a particularly important insurer such as Norwich Union comes forward and says 'We will be raising premiums', then others will be reconsidering their positions.

"And that normally means reconsidering up." Mr Harrison said there had been "upward pressure" on premiums for a couple of years, which the floods will have exacerbated.
He said a lot of people in high-risk areas might find themselves being priced out of the mainstream insurance market, but specialist insurers may fill the gap in the market.

Mr Harrison added: "Ninety per cent of damage is caused by the first inch of water, so if you can protect yourself from that first inch, you may be able to find insurance and, because you have taken that precaution, reduce the premium."

Royal Bank of Scotland, which owns Direct Line, did not announce any plans to increase household premiums when it unveiled interim results today.

It has taken a £125 million one-off charge in its half-year results from claims relating to the June floods and said it was likely to book a similar figure from the July events, which affected Gloucestershire.

RBS chief executive Sir Fred Goodwin pointed out that premiums were set by the market, which he said remained competitive.

He said: "Clearly the pressure will be upwards, but we will wait and see what comes through. If Norwich Union has put up prices by 10%, then we will see what the market reaction is."
Zurich Financial Services said claims payments from the floods in the UK in June should not exceed 400 million US dollars (£197 million) after reinsurance is taken into account.

It added that it was too early to give an estimate for the cost of claims for the floods that took place last month.

Floods recovery minister John Healey urged people in areas affected by the flooding to seek free and impartial advice before signing up with third parties who offer to help settle insurance claims for them.

Accepting help from third parties could mean people might not have enough money to fully repair their damaged homes and replace belongings, he warned.

Britain could receive up to £125m in emergency European Union funding to help foot the bill for damages from last month’s floods.

It is the first time the UK has applied for the funding that is available from the EU to tackle “major disasters” causing direct damage of at least £2bn. The US benefited from the fund in the wake of Hurricane Katrina.

Between 2002 and 2005, member states have received between 2.5 per cent and 5 per cent of the total damage suffered from the EU’s Solidarity Fund. If the UK’s total damage is £2.5bn, Britain might expect to receive between £62.5m and £125m.

“We are still assessing the extent of the damage caused in both the June and July floods. We are making the application now to ensure we would get any money as soon as possible,” the Department for Communities and Local Government said.

For the application to be successful, the technical criteria set out by the EU state that the total amount of damage caused by a natural disaster has to exceed £2.2bn. The European Commission does not provide full funding for the cost of the damage, only a proportion of the costs.

John Healey, communities minister, said: “The final decision will rest with the Commission – but we will make the strongest possible case. As part of this, we [continue] to carry out assessments of costs with those areas affected by the June floods and stand ready to do the same with areas hit by the more recent floods.

“Clearly those areas that are currently flooded need time to deal with more immediate practical concerns before reviewing the scale and cost of overall damage.

“The top priority has been [to safeguard] life and property ... some areas are only now starting to move into the recovery phase. We are committed to doing everything we can to help life return to normal as quickly as possible in local communities ... [This] application can play a part ...

“A successful EU application would be a useful addition to the package of support we’re already putting in place – this European bid is, however, only one part of our efforts to support flood-hit communities.”

But Peter Ainsworth, shadow environment secretary, said it was “a shame” the government had taken “so long to do this”.

“People have been suffering the aftermaths of this summer’s floods for well over a month now and we asked for the government to apply to the fund at the beginning of July. If the government had taken note the money might now be filtering through to people who need it most.”

If Brussels were to approve the handout, the money from the EU Solidarity Fund – which must be applied for within 10 weeks of a disaster – would help to meet the costs of cleaning up after the floods, housing evacuees and replacing damaged infrastructure.

The Financial Times Limited 2007

Rubbish used to be something we put in a black bag and forgot about, but suddenly we're all interested in where our waste goes.

Five years ago, Tony Sharkey would tell people he was in waste management and watch their eyes glaze. Now they want to discuss one of the great issues of politics... summed up, in the rubbish problem, in a form we can all understand. Global warming aside, just look at all that waste! We were just waiting to be asked to start composting and bottle-banking.

Now we are impatient for the powers- that-be to make some more spectacular efforts. And Mr Sharkey and his colleagues are about to demonstrate some possibilities. He is head of Future Technology for Yorwaste – an unusual kind of company, because its shareholders are two local authorities.

It was set up by North Yorkshire County Council, in 1993, in response to government demands for a clear division between the business of waste disposal and the policing of it. Many authorities hired private contractors. North Yorkshire set up Yorwaste to act as an arm's-length management company for its tips – bidding for the handling of waste from the district councils, which empty the bins, and picking up other business where possible, but returning any profits to the taxpayers' coffers. York Council bought into the idea when York went independent and both councils are represented on the Yorwaste board.

It sounds like a recipe for caution and for a while, Yorwaste did more or less what the council department it was formed from would have done. But it has had to respond to the new priorities created by the global warming panic. And in the past two months, it has made two announcements which were international news in waste management.

The first was a go-ahead for an adventurous new kind of waste-processor on a reclaimed section of tip at Seamer Carr, on the edge of Scarborough. It's the kind of demonstration project, for the region and the country, which Yorkshire Forward and Defra both want to see, and they have been talked into paying nearly half the cost. Everybody wants to stop you calling it an incinerator.

For one thing, the rubbish will not actually be burned. The word implies something wasteful, smoky and smelly whereas the Seamer Carr plant will be enclosed, efficient and clean. Incineration has become a derogatory word – the one used by all the people who regard the environment as their cause and rubbish disposal as the battleground. Officialdom prefers to talk about EFW, meaning energy-from-waste.

But careful words do not stop the whole idea being controversial and survivors of the long and fruitless argument over a proposed EFW plant for Hull and East Yorkshire, and the battles with Greenpeace over the existing one in Sheffield, will find it remarkable that the Seamer Carr plan gained its planning permissions without a squeak.

It should be up and operating before spring next year, processing half of the rubbish Scarborough currently sends to landfill.

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British Gas has thrown its weight around in the eco electricity world by launching what it calls the 'greenest tariff ever'.

The new tariff, available now, is called Zero Carbon and includes a mix of carbon-cutting measures, from offsetting your emissions and increasing the utility's purchase of renewables certificates to contributing to a new British Gas 'Green Fund'.'It will do more for the environment than any other product currently available,' says British Gas.

However, the company is yet to confirm its offsetting partner - it currently works with Pure on other projects - and the Green Fund isn't actually setup yet. When the fund does get underway, which British Gas says will be before the end of 2007, it will fund investment in renewables and help schools cut their carbon footprint.

Alex Lambie, founder of green electricity comparison site Greenhelpline.com, told us 'On a stand-alone basis, Zero Carbon is the greenest tariff available in the UK and contributes significantly to the development of additional renewable supply.'

But he adds, 'We must not forget that this launch is a testament to the many years of hard work put in by small, independent green energy suppliers, like Good Energy, and Ecotricity'.

The Zero Carbon tariff, which is a dual fuel one, should cost punters £84 a year extra. British Gas has also simultaneously launched a 'lighter green' tariff, Future Energy, which carries a smaller £20 premium.

Labels: Renewable energy certificates