ISH insurers face big claims for flooding after the heavy rainfalls across the country this month, making it harder for them to hit profit targets and potentially forcing them to raise premium rates for consumers, analysts said yesterday.
Hundreds of people were evacuated in west Wales at the weekend after floods swamped caravan parks and homes, and scores more were hit by smaller inundations in parts of England, according to media reports.
More flooding is expected amid forecasts for continued rain, with 39 flood alerts in force across England and Wales as of last night, the Environment Agency said.
Some insurers could miss their underwriting profit targets for the year because of a surge in flood-related claims, said Oriel Securities analyst Marcus Barnard.
“The recent rain and associated flooding are likely to lead to significant claims for UK insurers," Barnard wrote, estimating that the industry’s overall combined ratio of costs and claims to revenue could deteriorate by three to six percentage points.
viva and RSA, Britain's biggest home insurers, have combined ratio targets of 97 percent and 95 percent respectively and insurers are likely to push through price increases for home insurance in an effort to recoup flood-related payouts.