ABI: UK floods to cost insurers £1.3bn

The heavy flooding that hit the UK at the end of last year and the beginning of this will cost insurers around £1.3bn, the ABI has estimated.

The ABI’s estimate, based on aggregated data from the association’s members, covers the period 3 December 2015 to 3 January 2016.

The UK suffered severe flooding after being hit by three storm systems: Desmond, Eva and Frank.

The ABI’s estimate is similar to the £1.2bn estimate issued by accounting firm PwC – although this estimate excludes damage from Storm Frank, the last of the three to hit.

Reinsurance broker Aon Benfield said last week that, based on several reports, insured losses from the UK floods could exceed 1.5bn.

Claims bill rises

According to ABI statistics the average expected payout for each domestic flood claim is £50,000, compared with an average from the 2013/14 winter storms of £31,000.

Customers have made nearly 15,000 claims for property damaged by the flooding. More than 5,000 of these claims have come from business customers. Thousands of smaller claims for storm damage are being dealt with.

A total of 5,600 motor claims have been received and more than 8,300 initial visits have been made by loss adjusters.

More than 3,000 families are now in alternative accommodation while repairs are made to their homes.

Emergency payments of £24 million have been made to both families and businesses to spend on immediate needs, for example food, clothing and staff salaries. Costs for alternative home or business accommodation are paid directly by insurers.

ABI director of general insurance policy James Dalton said: “The December storms have brought devastating flooding to significant parts of the UK. Insurers and their representatives have been there to provide practical help and support as quickly as possible to families and businesses coping with the trauma.

“The impact of flooding will be felt for many months to come. Cleaning, drying out and repairing flood damaged properties is a major undertaking. Insurers and their expert teams will be there for the long haul to help communities rebuild and repair.”