The UK Government’s £200 million ($320.6 million) cuts to flood defences could lead to the withdrawal of insurance for flood, according to leading brokers.

JLT Partner for European Real Estate Bill Gloyn told a London review meeting on flood risks last week that removing financial support for preventative defences could have dire consequences.

He says although cover currently exists, it’s now in doubt because the removal of funding for mitigation means one of the conditions of the 2008 deal between the Government and Association of British Insurers has been broken.

The two parties agreed that flood defences would be maintained until the end of 2013 in exchange for insurers ensuring cover remained as widely available as possible in the long term.

But Mr Gloyn says the funding cuts could lead to the industry pulling out of flood cover in the UK completely.

“If cover is not available – and that is already the case in some areas of the UK – the consequences are almost too catastrophic to contemplate,” he said.

“And anyone thinking that the insurance market would not withdraw cover on a widespread rather than selective scale only needs to remember there is a clear precedent for this to happen.”

UK insurers withdrew from terrorism insurance in the early 1990s, which led to the establishment of Pool Re in 1993 to provide reinsurance.

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