Insurers count cost of floods as bill hits £1.2bn
THE RECENT bad weather could cost UK insurers £1.2bn, according to ratings agency Fitch.
Storms and flooding that hit many parts of the country in December and the early part of this year have left households, and ultimately insurers, counting the cost of the damage.
The agency estimates that losses to the industry will be “manageable” but that premiums could rise later in the year as a result.
“Fitch anticipates that the negative effect of weather related losses on the sector’s earnings will remain limited. These insurers are typically large, well-diversified players with the ability to offset losses through other profitable lines,” the agency said in a statement.
Analysts added that the sector is under increasing pressure as it becomes harder to make a profit while competition remains so tough. It predicts that earnings from investment will remain low in 2014.
A spokesman from industry body the Association of British Insurers said it would not comment on speculation about the total cost to its members. It is expected to publish its own estimate of final cost next week.
The industry has broadly welcomed Flood Re, an agreement to subsidise insurance for homes in high-risk flooding areas; but some have called for it to be extended to include all homes, not just those in lower council tax bands. The Prime Minister is said to be looking into ways to include all homeowners in the scheme.