Current floods could cost the insurance industry up to £400m - PwC comments

Published at 15:18 PM on 08 January 2014

Commenting on the effect on the UK insurance industry of the continued floods and storms, Mohammad Khan, insurance partner, PwC, said:

"The impact of the extreme rain and floods of recent months has become progressively worse. For the UK insurance industry, although this may not be the final estimate of the full costs of all the weather we have had, indications are that this could leave the industry up to £400m out of pocket. This estimate could develop further, particularly given the further flood warnings in place in the UK this week. Although the impact on individuals and businesses over Christmas has been severe, the 1,800 properties impacted so far does not compare to the 2007 storms where approximately 55,000 homes and business' were adversely impacted.

"When including uninsured losses, the full economic cost of the floods will be slightly above the insured cost of £400m. However, unlike in many parts of Europe, weather, flood and storm events are covered by personal and commercial property insurance as a default option rather than being a potential add-on. This has meant that many individuals over the holiday season have been able to gain assistance from their insurers in ensuring the necessary repairs to their property.

"Despite the weather in the last three months of the year, 2013 has still been one of the most benign weather years in terms of insured losses. For many insurers who announce their year-end results next week, we expect results for those writing personal and commercial property lines to have positive results. Those insurers that have done most to understand the potential for flood, storm and weather events will have benefitted from this investment given the events of the last two to three months."


ENDS

Miranda Ward

PwC | Financial Services PR
Office: +44 (0)20 7 212 4363 | Mobile: +44 (0) 7803 455 991
Email: [email protected]
PricewaterhouseCoopers LLP
http://pwc.blogs.com/press_room/


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