Can Geology Cause Property Cover Cancellation?

This Opinion piece from Terrafirma Research raises an interesting question for property insurers; how can technology offer greater insights and predictability when it comes to events like landslides, coastal erosion and other climate-associated risks? Plus, does the sector need a kind of Flood Re scheme for properties in known “at-risk” areas?

A major 40m landslide occurred at Nefyn Bay in North Wales earlier this year sparking concern for nearby residents and business owners. The area is prone to regular small-scale cliff collapses due to the superficial deposits of clays and silts making up Nefyn Bay which are easily eroded by the sea. More concerning, however, are the nine large landslides have been reported within a few miles of this location since records began.

Properties in the Nefyn area have an estimated value range of between £350,000 and £450,000. Industry experts have warned people may find it harder to get a mortgage or insurance in landslide-affected areas. Extreme weather events, such as intense rainfall, heatwaves, and flooding like those recently seen in the UK, will become more frequent as our climate changes. Research from Bank of England suggests that in a ‘No Additional Action’ scenario, global warming relative to pre-industrial times could reach 3.3°C by 2050, leading to warmer, wetter winters and hotter, drier summers.

Where ‘soft’ geology like that found at Nefyn exists, there is a clear relationship between increased rates of coastline retreat and climate change, and inevitably sudden landslide events will become more common. Another area prone to cliff collapse, frequently making news headlines is Birling Gap, East Sussex. Only two days ago (1st August 2021) a large section of the soft porous white limestone cliffs collapsed, causing part of the coastal footpath to disappear. Rising global temperatures, sea-levels and an increase in storminess will result in greater erosion rates, which is already being experienced across the UK.

Terrafirma’s National Ground Risk Model (NGRM: Climate™) identifies Nefyn as having one of the highest rates of coastal retreat in the UK. When conducting climate modelling, RCPs (Representative Concentration Pathways) are used which give best-case to worst-case emission scenarios. The best-case scenario – known as RCP 2.6 – projects a faster global effort to reduce emissions and adapt green energy and new technology, whereas the worst-case (RCP 8.5) projects an emissions pathway that tracks close to present day emission. If there is no active intervention of the coastline at Nefyn, this area could retreat as much as 250 m by the 2080s (RCP 8.5)

NGRM: Climate has revealed other coastal areas across Britain with alarming coastal erosion implications by the 2080s assuming no active intervention (Image 1). In Scotland, Barry Sands is projected to recede by a staggering 750 m. Along the east coast of England, Covehithe in Suffolk and Withernsea, Yorkshire could see between 400-500 m of land lost to the sea. These projections mean that communities and businesses in these regions face real challenges as we move through the 21st Century, and they will not be the only ones to deal with such unprecedented coastal change.


The UK is moving slightly further away from mainland Europe each year. The tides and currents are also chipping away at the land and this process is long-term and unstoppable. Almost 4000 properties are currently considered to be at substantial risk from coastal erosion across England, Wales and Scotland. NGRM: Climate analysis reveals that by the end of the century this figure is expected to rise to around 23,000 properties (RCP 8.5).

Owain Llywelyn of the Royal Institute of Chartered Surveyors in Wales suggested “higher insurance premiums” and a “30% and upwards” increase in mortgage deposits in areas “susceptible to attack from the sea”.

Mortgage lenders and property insurers are increasingly turning to companies like Terrafirma to help them plan ahead and protect their businesses and customers from climate-related ground risks like coastal erosion and subsidence. NGRM: Climate identifies baseline present-day exposures to all known ground instability risks and uses the latest climate modelling to project how coastal erosion and subsidence will impact property in the future.

This means that you don’t have to be a climate scientist, geologist or engineer to understand your business’ changing exposure to complex ground risks. Be it a mortgage portfolio or insurance book, Terrafirma can provide the technology, expertise and support to identify exposures and implement informed solutions.

About alastair walker 9329 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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