Weather damage insurance claims worst on record
Property insurers paid out the equivalent of £13 million every day last year to help homeowners and businesses cope with unexpected and unwanted events like flooding and theft, according to figures published today by the Association of British Insurers.
In total, the industry paid out £4.86 billion to homeowners and businesses in 2023. More than half of this figure – £2.55 billion – was for home insurance claims. This is a near 10% increase on 2022 totals (£2.33bn) and has been driven by weather-related damage.
While the total number of claims remained fairly level, the average claim paid to businesses and homeowners rose to £6,235, a 11% increase compared to 2022.1 And when adjusted for inflation, average claim costs have risen while premium prices have fallen in real terms.2
The key trend from the figures is that adverse weather played a huge part in the rise in home claims, with the value of weather-related damage claims reaching £573 million.3 This is the highest on record and 36% greater than 2022 (£421m).
This massive rise was largely fuelled by the succession of storms, including Babet, Ciaran and Debi that struck last autumn. Homeowner’s storms damage claims (high winds and debris) totalled £133m but subsequent flooding added £286m and represents half of all weather-related claims. A further £153m of weather claims came from burst pipes, most of which was incurred in the first three months of 2023 at the tail end of a cold winter.
Weather wasn’t just a problem for homeowners either, with businesses incurring £443m in weather damage claims in 2023 – though fire remains the primary peril to businesses (£880m).
Other trends in the data for total value of home insurance claims settled, include: 4
Theft claims value up 15% (though still lower than pre-2020 levels).
Non-weather-related water damage value (e.g. water leaks) up 20%.
Accidental damage claims value up 11%.
The above is despite a substantially smaller increase in the number of claims for these perils, reflecting the increased cost per claim for insurers to replace goods, make repairs or provide alternative accommodation.
Louise Clark, Policy Adviser at the ABI said:
“Extreme weather events may not feel so rare as they used to as we grapple with a changing climate. Insurers continue to be there for affected homeowners, with payouts hitting record levels after a particularly difficult autumn and winter with seemingly countless storms, from Agnes onwards leading to significant flooding.
“While insurance will continue to protect homeowners and businesses, we can’t afford to lose momentum on our flood defence programme, and we continue to press the government for further investment in flood defence and maintenance, as well as calling for changes to the planning system to discourage building where flooding might be more likely.”
Aviva announces £26m bulk annuity deal with the ABI
Aviva announced it has completed a £26m bulk purchase annuity buy-in transaction with the Trustees of the Association of British Insurers Pension & Assurance Scheme. This is the second transaction between Aviva and the Association of British Insurers Pension & Assurance Scheme, following a £10m transaction completed in 2017.
Aviva will insure the defined benefit pensioner liabilities for 191 members, removing the investment and longevity risk of these members from the Scheme. Members will see no change in the amount of their benefits or the way in which they are paid as a result of the transaction.
The competitive tender process to select an insurer and negotiate terms was led by Mercer, with Shepherd and Wedderburn LLP providing legal advice.
Jamie Cole, Head of Bulk Purchase Annuity Origination at Aviva, said: “We are delighted to have completed a second transaction with the Association of British Insurers Pension & Assurance Scheme.
“All parties worked closely to ensure the smooth and efficient completion of this transaction which provides greater security for Scheme members and shows Aviva’s flexibility in transacting with schemes of all sizes.”
Philip Exact, Chairman of the Association of British Insurers Pension & Assurance Scheme’s Trustees, said: “We worked closely with the ABI and Mercer over the last 12 months to plan, and then take, this important step on our journey to further reduce the Scheme’s risks.
“Aviva were selected after a competitive tender process and we are very pleased to have successfully completed this transaction.”
Deborah McWhinney , Risk Transfer Principal at Mercer, said: “We are very pleased to have been able to work with the Trustees again and bring this second tranche of pensioners to the market.
“This is a further significant step for the Trustees in their de-risking journey and represents a positive outcome for the long term security of members’ benefits. Despite ongoing uncertainty, we continue to see pension schemes concentrating on de-risking activity and we are looking forward to seeing more transactions throughout the year”.
ABI: Ο Andy Watson νέος πρόεδρος του Συμβουλίου Γενικών Ασφαλίσεων (GIC)
Ο CEO της Ageas UK, Andy Watson, διαδέχεται την Amanda Blanc ως πρόεδρος του Συμβουλίου Γενικών Ασφαλίσεων (GIC) της Ένωσης Βρετανών Ασφαλιστών (ABI).
Ο διορισμός ακολουθεί τη μετακίνηση της Blanc στην προεδρία του διοικητικού συμβουλίου της ABI.
Στο πλαίσιο του ρόλου του στο GIC, ο Watson συμμετέχει επίσης στο διοικητικό συμβούλιο της ABI.
Ο κ. Watson δήλωσε: «Είμαι πολύ ευχαριστημένος που δέχομαι την προσφορά να διαδεχθώ την Amanda ως πρόεδρος του Γενικού Συμβουλίου Ασφαλίσεων και να χτίσω πάνω στην καλή δουλειά της.
Η ασφάλιση θα είναι πάντα ένας ακρογωνιαίος λίθος οποιασδήποτε αποτελεσματικής, προηγμένης οικονομίας, ωστόσο η βιομηχανία μας αντιμετωπίζει πολλές προκλήσεις -από την τεχνολογία και τη ρύθμιση του κλάδου, ως τις ταχέως μεταβαλλόμενες συμπεριφορές και προσδοκίες των πελατών μας.
Εναπόκειται σε εμάς να αποφασίσουμε πώς μπορούμε να αντιμετωπίσουμε καλύτερα αυτά τα ζητήματα έτσι ώστε όλοι, και ειδικά ο πελάτης, να επωφεληθούν από την υπηρεσία που παρέχουμε».
Ο Huw Evans, γενικός διευθυντής της ABI, πρόσθεσε: «Πρόκειται για μια σημαντική εποχή στον κλάδο γενικής ασφάλισης, με τις διαπραγματεύσεις του Brexit να φτάνουν σε ένα κρίσιμο σημείο, με σημαντική νομοθεσία που ψηφίζεται από το Κοινοβούλιο για να μεταρρυθμιστεί η αποζημίωση σωματικών βλαβών και για την αντιμετώπιση των προκλήσεων της τρομοκρατίας και του αντίκτυπου του Grenfell.
Είναι επίσης μια εποχή κατά την οποία η οικοδόμηση εμπιστοσύνης και φήμης στην ασφάλιση δεν ήταν ποτέ πιο σημαντική.
Η εμπειρία και η τεχνογνωσία του Andy τον καθιστούν ιδανικό για να βοηθήσουν τον κλάδο να ανταποκριθεί στο δύσκολο περιβάλλον που αντιμετωπίζουν οι γενικοί ασφαλιστές του Ηνωμένου Βασιλείου τους επόμενους μήνες και χρόνια, συνεργαζόμενος με συναδέλφους από όλη την αγορά για να παρουσιάσουν μια ισχυρή και ενοποιημένη θέση απέναντι στην κυβέρνηση και τις ρυθμιστικές αρχές προς το καλύτερο συμφέρον των αγορών και των πελατών μας».