Barclays Deepens Flood Risk Reviews as UK Businesses Struggle to Find Cover

Barclays is taking a closer look at business clients whose operations or assets may face higher flood exposure. The expanded reviews reflect a shift in how quickly physical climate risks are showing up in business decisions, while many UK firms report difficulty obtaining insurance for climate-related risks.

Amit Puri, Barclays’ head of sustainability for business, said the bank uses internal models to examine different scenarios. Where those models indicate greater flood risk, clients receive a higher level of review. The process has developed over the past couple of years as the threat of flooding has become more pronounced, Puri said.

For insurers and businesses, the change matters because flood exposure can affect both the availability of cover and decisions about where to invest. Barclays’ assessment does not itself determine whether a business can obtain insurance or what terms an insurer might offer. It does show that physical risk is receiving closer attention in the bank’s client reviews.

Insurance access is a reported business concern

In a survey published Tuesday, Barclays found that 86% of 700 UK business leaders had already experienced difficulty obtaining insurance for climate risks. The respondents represented mid-sized, large and very large businesses across sectors including agriculture, hospitality, manufacturing, housing and transport.

The survey also points to ways that concern is affecting business plans. Half of respondents said their organizations had redirected capital away from places they considered more exposed to extreme weather. Roughly one in 10 said climate change had contributed to a decision in the past five years to close or scale back a business.

Those findings describe the experience of the surveyed businesses; they do not establish how often cover is unavailable across the entire UK market. They do, however, show why access to insurance has become part of the practical discussion about location and investment. For a business weighing a site or expansion, the possibility of difficulty obtaining climate-risk cover can influence planning alongside the physical threat itself.

Property firms are emphasizing resilience

More than 40% of respondents in real estate and housing said they had shifted investment toward resilience to extreme weather, rather than emissions reduction. More than half of businesses in those sectors said they would invest in resilience if they had more information about how it could help their operations.

That information gap is significant. A business may recognize that flooding could disrupt a property or its operations, yet still need clearer evidence to decide which protective measures to fund. The survey does not specify which upgrades firms considered or how much they planned to spend. It does suggest that better insight into the business value of resilience could shape where property and housing companies direct investment.

Across all surveyed businesses, flood risk was the leading climate factor in assessing the appeal of a location. For insurers, that focus makes the quality of location information and the timing of risk reviews central concerns. For businesses, it adds another reason to understand how flood exposure could affect a site’s insurability and day-to-day continuity.

Flood Re has limits and a stated end date

Flood Re, a reinsurance program, currently helps customers with homes at high risk of flooding obtain affordable insurance. The program is set to end in 2039, and it does not cover homes built after 2009. Those boundaries matter when considering how support for high-risk household cover fits into the broader UK insurance picture.

The program applies to homes, while Barclays’ survey focuses on businesses. Its availability therefore does not answer the insurance questions faced by commercial property owners or firms whose operations depend on flood-exposed locations. The source material also does not specify how the program’s future end date will affect individual premiums or the availability of cover.

Barclays’ closer client reviews sit within wider attention to flood, storm and other climate-related risks. The Bank of England’s Prudential Regulation Authority set out guidelines in 2025 calling for closer analysis of these risks by banks and insurers. For businesses, the immediate practical issue is more direct: understand the flood exposure connected to their locations, assess how insurance access figures into their plans, and seek information that can help them evaluate resilience spending.

Risks once treated as distant are appearing sooner

Puri said Barclays had long been aware of physical climate risks, but had not expected some of them to materialize so soon. Risks that teams might have treated as academic questions in 2017 or 2018 are now emerging earlier than anticipated, he said. That change in timing helps explain why the bank is increasing scrutiny in areas where its models flag potential flood exposure.

The survey’s figures, the client review process and the program’s stated limits each describe a different part of the issue: businesses report trouble obtaining climate-risk cover, Barclays is examining client exposure more closely, and Flood Re has a defined scope and end date. Together, they make flood risk a factor in both insurance planning and investment decisions. Businesses reviewing a location or long-term plans can start by clarifying their exposure and what information they need to evaluate resilience.

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