New Estimates Say UK Floods Could Cost Insurers up to $2.5 Billion

By Chris Vellacott | February 28, 2014

An additional £500 million [$838 million] has been added to the flood loss estimates from the almost continual storms, some reaching hurricane strength, which have produced widespread flooding to parts of Britain since December. The latest figures indicate that they could reach £1.5 billion ($2.51 billion), according to consultants at Deloitte.

The consultancy had previously estimated insured losses from winter storms in the UK since the autumn would be up to £1 billion [$1.676 billion], but they have upgraded their view after the bad weather continued into February.

“Our view on the cost of weather claims from both the storms and the floods from December through to the end of February is that it has now gone through the £1 billion mark and is heading towards £1.5 billion,” said James Rakow, insurance partner at Deloitte.

Rakow added the bulk of the cost will be attributed to damage to commercial and domestic property since the start of the year on account of storms in mid-February and floodwaters reaching the affluent outskirts of London.

Earlier in February, the British government summoned senior executives from top insurers to brief ministers on how they were addressing the damage caused by flooding.

Insurer RSA said on Thursday it expects to take a £45-£60 million [$75 to $100.5 million] hit from claims related to flooding in the UK while Direct Line forecast a £70-£90 million [$117.3 to $150.8 million] cost from claims between the start of the year and February 22.

 

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