66 R Elliott
‘appropriately’ determined in a competitive market. The government is,
however, responsible for creating the market conditions under which private
insurers can continue operating profitably: namely, by protecting and even
growing the insurable pool through ‘[f]uture government spending commitments on flood defences,’ through ‘improvements’ to flooded properties, and
to decreased building in floodplains (Flood Re 2018, p. 6). The elimination
of the flow between policyholders is in some ways a by-product of making the
free market possible. Even if policyholders themselves are not particularly
bothered by cross-subsidising each other, for them to do so requires ongoing
relations between the state and the market that are somehow inappropriate
and that must be revised, so that the market can provide the solution, even
where market solutions have thus far not been able to deliver on public aims
of providing affordable and accessible coverage for all.
Whereas the existing flow between policyholders in the United States is
rendered in itself unfair, in the United Kingdom the flow is problematic
more for what it seems to make possible, in terms of how individuals, the
government, and private insurers relate to flood risk and to each other. The
gradual elimination of cross-subsidisation will give all stakeholders the runway they need to learn and develop the kinds of control and responsibilities necessary to achieve the more prudent, and market-led, management
of flood risk.
Flows and overflows
In the United States and the United Kingdom, we find different strategies,
a technical transformation and a political agreement, that both pursue
future arrangements in which stigmatised flows between policyholders can
be eliminated. In this future, where water does or is predicted to overflow
riverbanks and beaches, to flow over the built environment, individual
responsibilities stop at the property line. People mutualise the burden by
participating in the risk pool of insurance, but their participation is tightly
delimited by the portion of risk for which they can be made accountable.
That this is so is a matter of equity and a matter of prudence.
That this will indeed be so is, however, by no means clear. The roll-out
of Risk Rating 2.0 has already been slowed down and deferred, following
concern from policyholders and their elected politicians about what will
amount, for most people, to increases in their rates. FEMA promises the
new rating system is coming, and it does not need Congressional authority to put it into place, because it is a technical adjustment rather than a
statutory one. But the form Risk Rating 2.0 ultimately takes – how faithful
it ultimately is to this initial vision (will it become 3.0, or 4.0, or…) – may
well be circumscribed by claims from various stakeholders about what ‘fairness’ indeed means or requires when it comes to dealing with flood risk and
loss. And in the United Kingdom, Flood Re is short on both details and
on actual power to direct government agencies to deal with the underlying
‘appropriately’ determined in a competitive market. The government is,
however, responsible for creating the market conditions under which private
insurers can continue operating profitably: namely, by protecting and even
growing the insurable pool through ‘[f]uture government spending commitments on flood defences,’ through ‘improvements’ to flooded properties, and
to decreased building in floodplains (Flood Re 2018, p. 6). The elimination
of the flow between policyholders is in some ways a by-product of making the
free market possible. Even if policyholders themselves are not particularly
bothered by cross-subsidising each other, for them to do so requires ongoing
relations between the state and the market that are somehow inappropriate
and that must be revised, so that the market can provide the solution, even
where market solutions have thus far not been able to deliver on public aims
of providing affordable and accessible coverage for all.
Whereas the existing flow between policyholders in the United States is
rendered in itself unfair, in the United Kingdom the flow is problematic
more for what it seems to make possible, in terms of how individuals, the
government, and private insurers relate to flood risk and to each other. The
gradual elimination of cross-subsidisation will give all stakeholders the runway they need to learn and develop the kinds of control and responsibilities necessary to achieve the more prudent, and market-led, management
of flood risk.
Flows and overflows
In the United States and the United Kingdom, we find different strategies,
a technical transformation and a political agreement, that both pursue
future arrangements in which stigmatised flows between policyholders can
be eliminated. In this future, where water does or is predicted to overflow
riverbanks and beaches, to flow over the built environment, individual
responsibilities stop at the property line. People mutualise the burden by
participating in the risk pool of insurance, but their participation is tightly
delimited by the portion of risk for which they can be made accountable.
That this is so is a matter of equity and a matter of prudence.
That this will indeed be so is, however, by no means clear. The roll-out
of Risk Rating 2.0 has already been slowed down and deferred, following
concern from policyholders and their elected politicians about what will
amount, for most people, to increases in their rates. FEMA promises the
new rating system is coming, and it does not need Congressional authority to put it into place, because it is a technical adjustment rather than a
statutory one. But the form Risk Rating 2.0 ultimately takes – how faithful
it ultimately is to this initial vision (will it become 3.0, or 4.0, or…) – may
well be circumscribed by claims from various stakeholders about what ‘fairness’ indeed means or requires when it comes to dealing with flood risk and
loss. And in the United Kingdom, Flood Re is short on both details and
on actual power to direct government agencies to deal with the underlying