The Association of British Insurers (ABI) is wading through a number of possibilities to fix the UK flood insurance crisis, including a pool option to ensure cover remains widely available for high-risk properties.

Last year the UK Government cut its flood defence funding by more than 17%, causing insurers to reconsider their position in the market.

Industry stakeholders last week met with the Department for Environment, Flood and Rural Affairs to further discuss the options for cover once an agreement with the ABI runs out in 2013.

Under the agreement insurers have made flood cover widely available in return for ongoing flood defence funding.

ABI spokesman Malcolm Tarling says the Government indicated that it will not continue the agreement past 2013 and a flood pool is just one of the legitimate options available for insurance.

“The model currently being discussed would involve customers in high flood-risk areas liable to pay premiums up to a certain level, with the cost of flood cover above a certain level coming from a pooled fund,” he told insuranceNEWS.com.au.

Both the ABI and the British Insurance Brokers’ Association (BIBA) agree that all parties need to work together to find a solution.

“The time has come for action,” ABI Director of General Insurance and Health Nick Starling said. “Insurers are determined to do all they can to ensure a sustainable market for flood insurance.”

“A key area of this work will culminate in helping customers to better understand how to access cover for a flood risk property, how brokers can support their insurance application and how BIBA can signpost people to find suitable insurance protection,” BIBA Head of Corporate Affairs Graeme Trudgill said.

The ABI is also looking at how flood-resistant measures such as repositioning power points higher on walls and using more resilient building materials can play a greater role.