Insurer plays down potential rise in household rates following NU announcement
Royal and Sun Alliance has said that it will not increase household premiums as a matter of course following the June and July floods.
This is in response to Norwich Union's announcement today that rates would be increasing by as much as 10%.
In a statement, the company said:
"In view of the comments from various insurers in today's press and speculation that their home insurance premiums will have to increase across the board, I thought it worthwhile to clarify our position.
Our approach is to charge the right price to reflect each customer's individual property and circumstances and through the development of our sophisticated flood risk mapping technology we are able to understand the risk of flooding at an individual address level. The concept of blanket price increases does not flow from this approach.
We look at weather claims over a long time period and one bad year doesn't necessarily mean premiums need to rise the following year. While the scale of this year's flooding is unprecedented we do expect flood events to occur and price accordingly. We have our own unilateral process for setting prices by reference to our own internal technical pricing models and based on a number of factors. It is the unique combination of these factors that determines the price a customer will pay."
Royal and Sun has put is claims bill for the June floods at £55m.
