The ‘win-win’ way insurers can mitigate weather-related claims

Insurers have been told that it will be easier to mitigate the risk of weather-related claims by engaging more with consumers ahead of extreme scenarios.

Matt Carter, specialty markets director at Altus Consulting, said a rise in weather events, such as storms, would lead to a spike in claims and that more engagement before their impact would be a “win-win”.

This came after departing Aviva boss Adam Winslow said the average cost of restoring homes for affected customers had been £60,000 per household over the last six years.

And Zurich UK’s chief of claims James Nicholson said his firm had seen “significant events such as storms and flooding” in the last couple of years.

He highlighted that the insurer was helping consumers prepare for claims through its warning service, which was created in partnership with Previsico.

This allows automated email alerts to be sent directly to customers, particularly those whose properties have been identified as at risk of flooding, ensuring they are notified and prepared for potential flood events.

”Insurers are looking to mitigate risk and therefore the number of claims,” Carter explained.

“Some have started providing touch points of support and engagement, such as alerts and tips in advance of weather events, which can really help customers prepare for an extreme weather scenario.

“The more engagement between insurers and their customers, the easier it is to mitigate the risk of claims – it’s a win win.”

Storms

Carter’s comments came after the Met Office put in place amber and yellow weather warnings as Storm Ciarán crossed the southern half of the UK last week.

And Storm Babet struck parts of eastern Scotland earlier in the year (19 and 20 October 2023), with a red weather warning issued due to heavy rain and strong winds.

This caused power shortages across Scotland and Northern England and homes had to be evacuated as wind and rain caused damage to properties.

“The rise in extreme weather scenarios is going to make insurance much more expensive, which is a big problem – particularly for those most likely to be affected, such as people living in coastal areas,” Carter said.

“No one can stop the winds blowing or the rain falling – meaning more claims from customers and losses for insurers, which will undoubtedly raise premiums to balance the books.”

Ageas said it had engaged a range of emergency support – both technological and human – to help people avoid having to make a claim in the first place and speed up the insurance process for those who are affected.

This included using a rapid settlement technology, developed by CoreLogic, to allow claims to be paid out faster while issuing advice to customers to help them protect their homes.

Claims director Stephen Linklater said: “Extreme weather is becoming more common and as one of the UK’s largest personal lines insurers, we’re continually looking at new ways we can better support our customers.”