Overcoming the Storm: How Is the UK Insurance Sector Facing the Higher Risk of Flood?

DBRS Morningstar has released a commentary discussing the impact of recent floods on the UK insurance sector.

Key highlights include:

-- The estimated total insurance claims related to the storms Babet, Ciaran, and Debi in the UK amount to around GBP 560 million, according to the ABI.
-- The higher cost of claims related to floods and adverse weather events is likely to push insurance premiums up in 2024.
-- Increasing premiums are raising concerns on the affordability of home insurance policies for households and businesses located in areas at high risk of flood.

“Protecting communities from the risk of flood, despite the unpredictable effects of climate change, while ensuring an effective flood insurance market needs additional measures to be implemented”, said Mario De Cicco, Vice President, Global Financial Institutions at Morningstar DBRS. “It remains crucial to continue investing in enhancing flood defenses as well as implementing property flood resilience measures for homes and businesses located in high-risk areas”.