In recent years, the UK has seen an increase in the intensity and frequency of storms, with names like Arwen, Ciara, and Eunice making headlines for their destructive impacts. As climate change continues to shape weather patterns, this trend is only expected to worsen, with potentially significant repercussions for homeowners, businesses, and the insurance industry. Storms can result in a surge of insurance claims related to property damage, flooding, and even business interruptions. In this blog, we’ll explore the impact that storms will have on the UK insurance market.
1. Increased Volume of Claims
With more frequent and intense storms, insurance companies are preparing for a steady rise in claims. From roof damage caused by high winds to flooding due to heavy rainfall, these weather events often lead to significant property damage. In 2022 alone, Storm Eunice led to nearly £360 million in claims. As storm events become more regular, insurers can expect a similar or even greater volume of claims in the coming years, especially during the storm seasons that tend to peak in autumn and winter.
2. Higher Premiums and Stricter Policies
As a result of the increased claims burden, insurers are likely to adjust their policies to mitigate losses. This could take the form of higher premiums, especially in areas prone to storm damage or flooding. Some insurers may also introduce stricter terms for coverage, requiring homeowners to take preventative measures, such as reinforcing roofs or installing flood barriers, before they’re eligible for certain protections.
In areas where the risk of flooding has become particularly acute, homeowners may find it difficult to obtain coverage at all, or they may be forced to turn to government-backed schemes like Flood Re. However, the continued rise in insurance claims due to storms may also test the sustainability of such initiatives. At Choice, we are pleased to be able to offer solutions via Flood Re to help protect our Household clients in these flood risk areas.
3. Delayed Claims Processing
During periods of high storm activity, insurers may struggle to keep up with the volume of claims. This could result in delays for policyholders awaiting compensation for storm-related damages. In the case of widespread damage, like that seen during Storm Eunice or Storm Ciara, insurers often prioritise emergency repairs and payouts for the most severe cases, leaving others to wait longer for assessments and repairs.
This surge in claims also puts pressure on the supply chain, from roofing contractors to surveyors, which can further delay the restoration process and add to policyholder frustrations.
4. Rising Costs for Insurers
The growing intensity of UK storms brings not only an increase in the number of claims but also a rise in the cost of payouts. Property repairs, flood mitigation, and rebuilding efforts are all becoming more expensive due to inflation in construction costs, supply chain disruptions, and the need for specialised equipment to handle larger-scale storm damage. Insurers are therefore likely to face greater financial strain as they settle an increasing number of high-value claims.
5. Flooding: A Major Concern
Flooding remains one of the most significant risks associated with storms in the UK, particularly in low-lying areas and those near rivers. While many homes and businesses are covered for storm damage, flood coverage can often require additional policies. As storms bring heavier and more prolonged rainfall, insurers may see an uptick in claims for both water damage and the associated costs of remediation, including mould removal, furniture replacement, and structural repairs.
Insurers are also likely to rely more heavily on geographical risk assessments to determine flood zones. Those in high-risk areas may find themselves facing increasingly unaffordable premiums or being required to invest in significant flood defences to qualify for cover.
6. Business Interruption and Commercial Claims
Storms don’t just affect homes; they can also disrupt businesses, leading to increased claims for business interruption and property damage. Businesses in areas prone to storms may face forced closures due to damaged infrastructure, downed power lines, or access issues. This leads to lost revenue and added operational costs. For commercial insurance holders, the ability to recover from a storm is critical to maintaining long-term stability.
For insurance companies, the rise in storm-related business claims could be particularly costly, especially when supply chains are disrupted, and businesses can’t return to normal operations quickly.
7. Future Trends: Climate Change and Risk Modelling
As climate change continues to influence weather patterns, insurers will likely need to adjust their risk modelling. Historical data may no longer be enough to predict future storm impacts, leading to more dynamic pricing models and real-time monitoring of weather-related risks. Some insurers may also offer incentives for homes and businesses that take proactive measures to mitigate storm damage, such as installing storm shutters or updating drainage systems.
In the future, expect to see more innovative insurance products tailored specifically to cover the risks associated with increasingly unpredictable weather events.
So, How Can Choice Help?
Storms in the UK are on the rise, both in frequency and intensity, and the insurance industry is bracing for the impact. At Choice, we continue to evolve to keep pace with the growing risks. From flood mapping, to advanced post code checks, we remain committed to staying at the forefront of available technology to determine the best course of action for our clients. We work closely with our brokers to understand risk and by staying informed and prepared will be crucial in minimising damage and ensuring adequate coverage as the storm season becomes an ever-more prominent feature of the UK’s climate reality.
