Aviva boss warns England is building homes that may never be insurable

Amanda Blanc, the chief executive of insurance giant Aviva, has warned that thousands of homes being constructed today could eventually become impossible to insure because of rising flood risk. Speaking to the BBC's Big Boss Interview podcast, Blanc said the danger was not a distant prospect but something already locked into planning decisions being made now, with properties raised on land that flood modelling clearly identifies as vulnerable.

The scale of the warning, she said, is measurable. Based on current building patterns, roughly 115,000 new homes will be erected inside flood zones over the next decade. Blanc questioned the logic of that, saying she was not convinced it "makes sense" to keep approving housing on land where the outlines of future flooding are already known. Her concern, she explained, is about location itself — the starting point of a property's exposure — rather than the quality of the build or the resilience of its fittings.

Official figures support the backdrop to her remarks. 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 sharper, more recent measure: one in nine homes built between 2022 and 2024 already sits at medium to high risk of flooding, meaning their owners face meaningfully higher insurance costs today, not decades from now.

Looking further ahead, the insurer's modelling shows the position deteriorating sharply. Nearly a third of new homes completed in 2024 are expected to face some degree of flood risk by 2050, while one in seven of them will be in the medium-to-high risk band as extreme weather becomes more frequent and more severe. That gap between a third exposed to any flooding and a seventh facing serious risk matters commercially, because it is the latter group that insurers struggle to price and may eventually decline to cover at all.

The climate context has already shifted beneath the property market. The Met Office estimates that, at current levels of global warming, record-breaking wet winters of the kind the UK experienced in 2023-24 have shifted from events occurring roughly once every 80 years to ones expected roughly once every 20 years. A risk factor that becomes four times more frequent within a mortgage term, a building's expected service life, or simply a family's tenure is no longer a rare outlier, and Blanc's argument is that the industry is still pricing and planning as though it were.

Blanc said England was "for sure" building homes that may at some point become uninsurable, and pressed the case for treating the location of floodplains as settled public knowledge rather than something to be rediscovered during an application or an underwriting review. It is, she argued, well documented where flooding occurs, which places a duty on planners, developers and buyers to engage with that information before ground is broken rather than after the first claim is filed.

She also raised the intermediate cases — construction on the edges of flood zones rather than inside them. Buildings that border mapped flood plains can still be exposed to rising water, surface drainage problems and the knock-on effects of disrupted local infrastructure, she said, and standard construction approaches do not necessarily address those vulnerabilities. There are, in her view, numerous ways a property can be made more or less susceptible to flood damage during design and construction, which implies a good deal of avoidable exposure is being locked in at the drawing-board stage.

Why the issue has moved from concern to crisis point is a question of how insurance markets work. Insurers price risk by pooling broadly similar properties; when the number of exposed homes in a rating region rises sharply, premiums for that region climb or cover is withdrawn altogether. For homeowners, that can mean an unrenegotiable jump in costs, a requirement to leave the property uninsured, or — in the most severe cases — a house that is effectively unmarketable because no mainstream lender will secure a mortgage against it. The knock-on effects reach well beyond individual owners, since flood risk concentrated in particular developments can also weigh on local infrastructure, insurance pools and house prices.

The warning lands at a politically sensitive moment. The BBC has approached the government for comment, but at the time of publication no response had been provided. Blanc separately urged ministers to avoid policy "kite flying" ahead of Chancellor John Healey's first Budget, scheduled for 28 October — a caution about announcing measures that are then abandoned or altered, and about the cost that uncertainty itself imposes on households and savers.

Her concern about that dynamic was illustrated by her experience of pension policy speculation. Aviva is a major UK private pension provider, and she said that speculation about the last couple of Budgets prompted a surge in people cashing in. In the past year, withdrawals ran at roughly 30 times the normal rate, she said. She stressed the danger is that such decisions are hard to reverse: once a tax-free lump sum is taken, it cannot be put back, and savers may come to regret the move later. Her plea to policymakers was to be "very, very thoughtful" about what they test and consider.

Blanc also positioned Aviva as willing to play a part in the country's economic plans. The company said it was "ready with capital" to invest in infrastructure, noting that it already commits more than £100bn to the UK, of which around £35bn goes into infrastructure including hospitals, schools and windfarms. She said those investments offer good returns for pension holders and scheme members, while acknowledging more detail is needed to convert that readiness into actual deployment. Policy announcements so far include a scheme to help first-time buyers onto the property ladder and a commitment to a "new age of industrialisation".

Her final point concerned the pension triple lock, which raises the state pension by the highest of average wage growth, inflation or 2.5%. Asked whether the government should change it, Blanc declined to take a position, but flagged the arithmetic behind the debate: any reduction in the state pension would need to be offset by higher private provision, and the balance between the two had to be thought through carefully before it is altered.

Taken together, her remarks amount to a warning that the UK is not so much failing to prepare for climate risk as failing to prepare for the property market that climate risk is creating. Whether 115,000 homes are raised in flood zones, and whether those homes remain insurable in 2050, will be determined largely by decisions being taken by planners and developers in the next few years — years in which the Budget on 28 October is set to shape both the housing pipeline and the wider economic context in which those decisions are made.