3.6 POLITICAL SUPPORT IF THE DUTCH MARKET IS TO INCLUDE A ROLE FO...

7.3.6  Political  Support  

If the Dutch market is to include a role for private flood insurance in the future, political support is

necessary to create the market conditions for success. For example, to reform or repeal the WTS would

require significant political backing. As a spokesman from Dutch Association of Insurers stated in

personal correspondence after their proposal for mandatory flood insurance was rejected:

“[w] e are no longer working on the development of this insurance solution and wait for the government

and politics to make a move.” (EP, 2013)

In the current political environment politicians prefer to talk about flooding in the Netherlands in the

context of how safe the country. Flood risk is highlighted when politicians make a case for more public

spending on flood protection. But selling the idea of, for example, mandatory private flood insurance

would be not make a politician popular in the Netherlands. Indeed, at present, political support for

changing flood compensation arrangements is not high. Previous governments have been keener on

changing the status quo with the fiscal goal of reducing the extent of state’s liability for flooding. It was

the government that originally approached the Dutch Association of Insurers to reconsider selling flood

insurance again at the start of the global financial crisis in 2008 (EP, 2013). The Association’s first

response was a public private arrangement where the state would retain responsibility for losses above

a limit but this was rejected as not transferring enough financial responsibility. This enthusiasm for

change seems to have worn off.

Today’s politicians appear not to be interested in reforming the current arrangements. The key role the

UK government played in negotiating the replacement to the Statement of Principles is in contrast to the

situation in the Netherlands where it appeared that the government played very little role in the

consultation on the Dutch Association of Insurers proposal. It can be assumed therefore that they were

either neutral and did not care about the outcome or were content with the status quo

The situation with

regard to the WTS is not helped as responsibility for this law lies with three different ministries: Finance,

Infrastructure and Internal Affairs (EP, 2013). It is unlikely in the current climate of austerity that the

government will push for changes that will lead to citizens paying more. Already the insurance premium

tax has gone up from 9.7% to 20%. On top of this, it would not be popular for the government to push for

new mandatory flood insurance charges as well.