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.”
Verisk Announces Integration with Seek Now to Streamline Ground Truth Assessment of Homeowners Insurance Claims
Verisk (Nasdaq: VRSK), a leading global data analytics and technology provider, has announced a strategic integration with Seek Now, a leading claims inspection service provider and business intelligence solution in the residential and commercial property insurance space. This integration expands Verisk’s open ecosystem, offering claims adjusters increased flexibility and streamlining the damage assessment process. Seek Now’s technology will be seamlessly integrated within Verisk’s suite of property estimating solutions, eliminating the need for manual information transfer.
As a result of this integration, shared customers of Verisk and Seek Now will experience a simplified and accelerated claims resolution process, improving their claims outcomes while enriching their policyholder’s overall experience. The integration will also streamline referrals, real-time routing, status and data collection process for property insurance claims leading to a meaningful reduction in cycle times.
“Verisk continues to expand our open ecosystem and to innovate to help our clients complete their important work with greater ease, efficiency and accuracy,” said Aaron Brunko, president of property estimating solutions, Verisk. “We’re pleased to add Seek Now to our collaborative ecosystem in an effort to accelerate claims efficiency and have a positive impact on the entire insurance value chain.”
“By integrating directly within Verisk’s Property Estimating Solutions, every adjuster within our extensive network of mutual insurance carrier customers gains swift access to ground truth data, often within just 24 hours,” said Russ Carroll, CEO of Seek Now. “Regardless of the claim type—whether it’s wind/hail, interior, water damage, or any other—adjusters will now enjoy a seamless pathway to enhance their adjudication processes, thus ensuring superior service for home and business owners like never before.”
Verisk is committed to innovation and efficiency in an open claims ecosystem, with modern integrations and data connections. By simplifying process complexity, fostering innovation, and enhancing collaboration, this ecosystem can empower insurers and claims professionals to navigate the landscape of claims management. Our solutions enable more accurate estimations, early identification of severity, and heightened customer satisfaction, all while reducing operational costs. Verisk’s leadership in the claims ecosystem ensures that our solutions remain at the forefront of innovation, continually evolving to meet the industry’s evolving needs.