How is flooding in the UK affecting the insurance market?

Ciara, Phoebe, Dennis – for such devastating weather events the recent storms that have lashed locations in the UK, and across the world, seem to have inappropriately friendly names. Extreme weather has felt like one of the hallmarks of winter this year – and summer last year - and flooding has been constantly in the headlines. Most experts predict that it’s only likely to get worse so what does this mean for the UK insurance market?

Flooding in the UK

The experience of flooding can be devastating, from the damage this can do to a property to the impact it has on the communities in which we live. Last summer sinkholes appeared on the M25 during a period of particularly heavy rain and transport, such as the rail network, was seriously disrupted by floods. Already this year properties have been swamped, bridges collapsed and some communities have been repeatedly hit by the heavy rains that have followed on from serious storms. It’s estimated that storms inflict £7.7bn worth of damage on a third of UK property. According to some reports the damage from Storm Ciara alone will be responsible for around £200m worth of losses for UK homes.

How is flooding affecting the insurance market?

Insurers are dealing with much higher volumes of claims as a result of the flooding that has affected UK homes and businesses in recent years. Some insurers reported five times the typical number of insurance calls in the wake of recent Storm Dennis and there is a considerable additional burden on the market in terms of paying out under policies.

This is a trend that has been building for some time – for example, in 2016 the Association of British Insurers reported that the total bill for insurance claims from that winter’s storms was likely to reach £1.3 billon. It has involved insurers ensuring that they are well equipped to be able to provide emergency pay outs to consumers who are in immediate need, as well as handling the processes involved in the more severe claims, such as arranging for visits by loss adjusters.

A new shift

There is no indication that flooding is a passing trend – in fact it’s been widely reported that flooding as a result of extreme weather events is only likely to worsen in the years to come. This has meant a shift for some insurers as more consumers look to take steps to protect themselves if the worst does happen. It’s not just about ensuring that policies are in place and there is the technology and infrastructure to process a sharp spike in claims but also that consumers are well informed in terms of what policies do – or don’t – cover.

Flooding has had a huge impact on homes and businesses across the UK and is forecast to be a constant feature of both winter and summer seasons in the years ahead. This has meant that the insurance market now needs to be ready for whatever the weather might bring.

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