Association of British Insurers: Weathering the Storm

LONDON, England, Dec. 15 -- The Association of British Insurers issued the following news on Dec. 14, 2023:

Insurers expect to pay out an estimated pound sterling560 million to help customers who suffered damage caused by recent Storms Babet, Ciaran and Debi that struck in October and November according to figures out today from the Association of British Insurers (ABI).

"The only thing to expect from our weather is the unexpected. Insurers are ready for bad weather to strike at any time. From making emergency payments, arranging any emergency temporary accommodation, drying out and decontaminating flooded homes and businesses and organising repairs, insurers' support continues long after the bad weather subsides, until their customers get back on their feet."

-Louise Clark, the ABI's policy adviser on property insurance.

Our data estimates:

* pound sterling560 million will be the total claims cost paid out to support customers. Of this pound sterling352 million will be for damaged homes, pound sterling155 million for damaged business, pound sterling53 million for damaged vehicles.

* 48,700 claims notified. This breaks down to 36,100 home insurance claims, 5,370 business insurance claims, and 7,210 vehicle damage claims.

* 1,770 emergency payments totalling pound sterling5 million paid to help customers in the immediate aftermath.

* 1,460 families housed in temporary alternative accommodation while their homes are being made habitable again.

Storms have a habit of coming as a trio

These estimated payouts compare to pound sterling497million paid following Storms Dudley, Eunice and Franklin that struck in February 2022, and pound sterling543 million following Storms Ciara, Dennis and Jorge in February 2020.

A turbulent period

The recent storms come after a year of turbulent weather that saw surges in subsidence claims following last year's record-breaking heatwave, and a spike in burst pipe damage, that, in the year ending 30 September, contributed to the value of property insurance claims costs rising 17%. This was above the increase in the average buildings/contents combined insurance premium in the same period.

Average price of home insurance remains competitive

Our latest Property Insurance Premium Tracker shows that in the third quarter of this year:

* The average price paid for a combined home buildings and contents policy was pound sterling350. This is up 15% (pound sterling46) over the year since Q3, 2022.

* The cost of the average contents policy at pound sterling126, rose by 10% on Q3 2022. The average price paid for buildings only insurance at pound sterling273 rose by 19% over the same period last year. This in part reflected increases in the costs of building materials.

Louise Clark said:

"We may not be able to stop bad weather, but we can be more resilient to it. That is why some insurers support the Build Back Better initiative that enables flood resilient measures to be installed when repairing properties after a flood.

"The government also has a role to play by ensuring that the planning system discourages building in flood vulnerable areas. We also need building regulations that make our homes more resilient to climate change challenges like floods and storms."

* * *

Original text here: https://www.abi.org.uk/news/news-articles/2023/12/weathering-the-storm/