More rain could see flood premiums rise

Insurers’ losses from the recent deluge of flooding and landslides to hit the UK are not expected to top the £1.25bn that was incurred by the industry in 2007, according PricewaterhouseCoopers insurance partner Mohammad Khan.

But Khan warned that insurers’ bottom lines will suffer, with the knock on effect of rising premiums in flood-affected areas if the flooding continues to persist.

“The recent floods and landslides caused by the torrential downpours over the past few days have increased the risk of future floods and landslides,” said Khan.

“If the weather reports for the coming few days are wrong and we have more rain, not torrential but just worse than expected, it could unfortunately lead to more flooding and landslides.

“This time five years ago the UK experienced some of the worst floods in a generation. Losses to insurers in June 2007 alone amounted to £1.25bn. We do not expect the current flooding to be as significant as this, but these figures are a stark reminder of how severe flood insurance losses can be.

“Given that the flooding and landslides are ongoing, it’s difficult to currently ascertain the impact on insurers. Insurers do hold reserves for flooding during the year so it is possible that they can tolerate the impact of the current floods.

“However, if the rain and therefore the flooding and landslides continues, it will impact insurers’ results, which will have a knock-on effect on premiums in the areas affected by flooding.

“Any household owner affected by the floods should contact their insurer as soon as possible so that their insurer can help them as quickly as possible.”

GAB Robins put out a report yesterday saying that Belfast Fire and Rescue dealt with more than 700 flood-related call-outs in greater Belfast as severe weather swept through Northern Ireland causing flooding and loss of power for about 1,000 homes with 40mm of rainfall recorded in the space of a few hours in some areas.

Flash-flooding has caused problems across Herefordshire and Worcestershire with the fire brigade receiving 30 calls in each county on Wednesday morning.

A Met Office has amber warning remains in place and there is a risk of further flooding later, with a yellow warning issued for many parts of northern Britain, Scotland and the Midlands.

GAB Robins has a number of loss adjusters on the ground in England, Scotland and Northern Ireland and has already received numerous claims from the Herefordshire and Worcestershire areas, as well as the East Midlands, greater London, Northern Ireland, the North West, Scotland and the West Midlands.

Merlin said its Belfast office has been on high alert and adjusters worked through last night, attending affected properties. Today the company is dealing with an influx of flood claims following two inches of rain falling in under two hours, with the South and East Belfast, Dunmurray and Lisburn areas particularly badly affected.

Merlin said that the cost of damage to properties were between £5,000 to £150,000 per property.

Merlin loss adjusting and claims services director Russell Crewe said: “We are continuing to monitor the situation and expect further instructions as the turbulent weather continues. Our immediate and co-ordinated proactive response has seen policyholder visits taking place at an exceptional rate.

“Additional resource has also been identified and is ready to go at a moment’s notice. We are keeping clients regularly updated as the situation unfolds.”