UK insurers paid out a record £1.4bn to home and business owners in the second quarter, as adverse weather led to events like floods, fires and storms.
This was also the fifth consecutive quarter that weather-related claims for homes have been above £100m, according to figures from the Association of British Insurers, which represents more than 300 firms.
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The UK’s insurance market is the largest in Europe and third biggest in the world. The industry worldwide has been scrambling to find new models for insuring climate damage-prone areas.
“Our latest figures demonstrate the devastating impact that adverse weather can have on people and their homes,” said Louise Clark, policy adviser at the ABI.
“That’s why it’s important that the government takes the opportunity to reform the planning system, to focus on prevention and resilience measures to help reduce our nation’s vulnerability to the effects of climate change.”
Urgent government action to tackle surface water flooding and maintain flood investments and maintenance would also help, she added.
Around the world, insurers are increasingly tying insurance premium rates to the preventive measures that are being taken by property owners to mitigate weather-related damage.
Governments are starting to step in too.
In the UK, a government-backed scheme called Flood Re has since 2016 been helping insurers cover people living in flood-prone areas.
And the head of Eiopa, the EU’s insurance regulator, told the FT in April that there was growing support among politicians in the bloc for national risk-sharing schemes for natural catastrophes.
Europe is the fastest-warming continent, according to research from the EU’s climate agency, Copernicus, and the UN’s World Meteorological Organization.
