The Association of British Insurers (ABI) has given its backing to radical proposals to build houses on stilts in the Thames Gateway area.
Last week the Liberal Democrats demanded that new homes and businesses in the area must be built 'several feet above the ground like in Zanzibar' to prevent flood damage.
It now appears the ABI believes the proposals could work as part of a larger package to reduce potentially massive insurance claims.
Sebastian Catovsky, policy adviser on natural perils, said: 'I am pleased they have picked up on this. I think it is very helpful.
'You can't just rely on using the planning system to reduce the costs of flood damage, because so many houses will have to be built on the flood plain. We have to think about other ways of reducing the flood risk, and by making buildings more resilient it will impact on insurance in a good way.' According to a report published by the ABI earlier this year, the costs of flood risk caused by new developments in the Gateway area could add more than £47 million to the UK's annual insurance bill.
Lib Dem London Assembly environment spokesman Mike Tuffrey said: 'With over 85,000 homes in total planned for the Gateway's flood plains and £19 billion-worth of assets at stake, it's vital that new and innovative ways are put forward to reduce the threat of flooding.' He added: 'Without sustained cooperation and financial backing, some new buildings in the Gateway will be in danger of turning into uninsurable and uninhabitable white elephants.'