Insurance claims triggered by the severe spell of winter weather that the UK endured during December 2010 look likely to be at least £110m higher than the average for the same period of December according to insurer RSA. The coldest December for 100 years brought snow and ice to the UK and caused a large amount of damage, particularly from burst water pipes.
RSA said that it received over 8,000 claims for weather related problems at an average cost of £6,700 each since November. From their figures they estimate that the insurance industry will have to pay more than £1 billion to UK homeowners. As a result it’s said that homeowners insurance rates in the UK could rise by as much as 7%.
RSA said that its winter weather claims were also higher than normal in other countries in Europe such as Scandinavia and Ireland.
On top of the homeowner insurance claims that are still being dealt with by insurers there are also going to be other sources of losses due to the cold weather. Business interruption claims are beginning to rise with companies as large as budget airline Easyjet announcing the impact of the cold weather to their earnings. Easyjet said that the cold weather could impact its bottom line by as much as £18m.
Travel insurers are also bracing themselves for losses due to the period of winter weather with Claims International, the travel business arm of Cunningham Lindsey saying that the severe weather caused travel insurance claims to be 30% higher than normal. 85% of those claims were for expenses incurred by travellers while stuck at airports waiting for delayed flights, the rest are largely for cancellations.
The total cost to the country and the insurance industry of a period of severe winter weather is unlikely to be accurately known, however it is safe to assume that the insured loss will be well in excess of £1 billion demonstrating the need for robust weather risk management plans for businesses, insurers and governments.
Subscribe for free and receive weekly Artemis email updates
Sign up for our regular free email newsletter and ensure you never miss any of the news from Artemis.