Insurance industry facing ‘challenging period’ due to regularity of storms

Storms across the UK has made it harder for insurance firms to invest their time in adopting property flood resilience schemes.

That was according to experts at the roundtable Tackling Property Flood Risk last week (5 March 2024), where it was highlighted that the regularity of storms had become a challenge for the industry.

Bad weather has battered the UK recently, with Storm Henk, for example, leaving homes and roads flooded at the start of January.

Storm Babet also struck parts of eastern Scotland in October 2023, with a red weather warning issued due to heavy rain and strong winds.

And according to the Health Effects of Climate Change (HECC) in the UK: 2023 report, published in July 2023, the frequency and magnitude of flooding events is projected to increase in the UK.

“It’s been a challenging period because storms have been regular in the last 12 months,” Ian Gibbs, national technical manager at Sedgwick Repair Solutions UK, said.

“What that has meant for the insurance industry is that they have been busy for a long time.”

Aaron Jones, flood risk director at Ashfield Solutions Group, noted that this meant there was a ”scattergun approach to try and capture all losses” incurred from storms.

In turn, he felt this meant challenges when it came to property resilience, with ”an already busy life [making] it more difficult to investigate and try something new” for customers.

Build Back Better

Jones highlighted that among schemes that could be tried was Flood Re’s Build Back Better programme.

Launched in April 2022, Build Back Better offers householders the opportunity to install property flood resilience measures up to the value of £10,000 when repairing their properties after a flood.

When Flood Re revealed its results for the last financial year in July 2023, it revealed that 37% of the UK insurance market was yet to commit to offering the scheme.

Gibbs noted that the last year had “been an interesting time” for Build Back Better as it was the “first time it has really been tested”.

Speaking in July 2023, Kelly Ostler-Coyle, head of communications and stakeholder engagement at Flood Re, said the mutual reinsurer would be focusing on education over the next 12 months to help with uptake.

“We want to extend the training videos to brokers and insurers if they want it for their CPD (continuing professional development),” she said.

“We can add in questions at the end, so people can use that to get their CPD points and we think that would give more uptake.”