INSURERS face a bill of “hundreds of millions of pounds” following this summer’s floods, an analyst said yesterday.
Barrie Cornes of Panmure Gordon estimated that Aviva, which insures around 12 per cent of households in the UK, will be hit with a charge of £20-£40m for flood damage during the first six months of 2012.
He sees RSA taking a hit of around £8-15m and Legal & General paying out £5-12m for the same period.
Since then the wet weather has continued, causing flash floods in towns across the UK and raising the prospect that payouts will increase in the second half of the year.
On Wednesday environment minister Caroline Spelman announced plans to include a levy on all household insurance premiums to subsidise cover for those in high-risk areas. It is an attempt to ensure that insurance remains affordable even after the current deal – which sees insurers promise affordable cover in return for government spending on flood defences – expires next year.
Meanwhile AA Insurance said yesterday that cars have suffered at least £35m worth of damage in the last fortnight’s storms. Its staff have dealt with over 400 claims in the past two weeks. It can often be prohibitively expensive to repair damage caused by hail or flood, with a large percentage of these vehicles being written-off.