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New London mayor should reveal City flood plans
A major flood could cripple the capital’s financial centre – and the UK economy
London
NYSE: AOC

LONDON, 8 May 2008 - Risk adviser and insurance broker Aon is joining forces with the City Property Association to call upon the London mayor, Boris Johnson, to reveal his plans for preventing a major flood that could cripple the City. Without visible action, the new mayor could be responsible for potential hikes in flood insurance premiums, if not the withdrawal of cover for homes and businesses in London.
The City is mostly situated outside the highest risk areas but its key transport links - trains, tubes and buses - run through high flood risk zones south of the Thames (1). Inadequate flood protections and heavy rain forecast for this summer mean that a serious flood could overwhelm the existing flood defences along the river and the operations of the City would quickly grind to a halt.
As the mayor has ultimate responsibility for planning, Mr. Johnson needs to take a fresh look at handling flood risks to protect the income of the City and the homes of residents. He will need to work with the government to guarantee sufficient investment in adequate flood defences. This will ensure they meet the increased risk that has been demonstrated by UK-wide floods over the past few years. With that additional reassurance, insurance companies are more likely to continue to offer affordable cover to property owners in areas of flood risk.
However, if the government does not start investing rapidly in adequate flood defences, insurers could even remove flood cover. Property owners could become more exposed to recovery costs as London follows areas such as Gloucestershire to become another high risk and potentially uninsurable region.
Bill Gloyn, chairman of real estate Europe at Aon Mergers & Acquisitions Group and recently elected president of the City Property Association, said: "Naturally, the mayor has focused on the vote attracting issues of crime, affordable housing and the environment but a major flood would affect thousands of homes and could bring our financial centre to a standstill through the lack of transportation. The disastrous impact of a potential flood on London business demands serious attention and an urgent increase of investment in the flood defence infrastructure that protects our capital.
"Mr. Johnson also needs to be aware that flood disruption will be exploited by other cities keen to undermine the supremacy of London as the world's leading financial centre. Any major flood in central London would be disastrous for not only the City but for the UK economy as a whole."
(1) Go to http://maps.environment-agency.gov.uk/wiyby/mapController and search for postcode SE1 2AA
Ends
For more information contact:
Alexandra Lewis
020 7882 0541
Alexandra.lewis@aon.co.uk
About Aon
Aon Corporation (NYSE:AOC) is the leading global provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting. Through its 36,000 colleagues worldwide, Aon readily delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Our industry-leading global resources, technical expertise and industry knowledge are delivered locally through more than 500 offices in more than 120 countries. Aon was ranked by A.M. Best as the number one global insurance brokerage in 2007 based on brokerage revenues, and voted best insurance intermediary, best reinsurance intermediary, and best employee benefits consulting firm in 2007 by the readers of Business Insurance. For more information on Aon, log onto www.aon.com.
About the City Property Association
The City Property Association was formed in 1904, to represent and defend the interests of property owners in the City of London. Nowadays it also includes occupiers and professional property advisers in the membership, which has recently been on the increase, and currently stands at about 150. Its vision is to foster the right environment where business can thrive; to promote the City as a place where people should want to work, reside and visit, and as such be best placed to compete fully with business rivals in Europe and throughout the world.
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