Insurers Report Record Claims for Weather-Related Damage in UK

Insurers paid out a record £585 million (U.S. $724.7 million) for weather-related damage to people’s homes and possessions in 2024 in the United Kingdom, according to the latest data from the Association of British Insurers.

The record claims come following significant and consistent bad weather, including 12 named storms in the 2023/2024 storm season – the most named storms since 2015/2016, the ABI said, quoting Met Office statistics.

Claims for damage to homes from windstorms, flooding and frozen pipes in 2024 surpassed the previous 2022 record for the same claim types by £77 million ($95.4 million). The figure is also £127 million ($157.3 million), which is 28% higher than the weather-related claims payouts for 2023.

Total property claims for both commercial and domestic property policies in Q4 2024 were £1.6 billion ($2 billion), and took the annual claims total to £5.7 billion ($7.1 billion) – the largest amount paid out in any year on record, said the ABI, explaining that the claims figure include both commercial and domestic property policies.

Property claims and insurance data from the ABI include:

For the final quarter of the year, claims for damage to homes from adverse weather reached £146 million ($180.9 million) – making it the seventh consecutive quarter that weather-related claims have been above £100 million ($123.9 million). The quarterly claims figure is also £17 million ($21.1 million) more compared to claims paid for the same type of damage in Q4 2023.
Bad weather wasn’t just a problem for homeowners, as insurers paid out £102 million ($126.4 million) to businesses for weather-related damage and business interruption during the final quarter of the year. This is an increase of 7% on the previous quarter, and 16% on Q4 2023.
High claims costs had an impact on premiums, as the annual average price of combined building and contents home insurance in 2024 went up by £55 ($68.13), or 16%, to £395 ($489.30), compared to 2023.
The average price of a combined household buildings and contents policy in Q4 2024 was £403 ($499.20), or £4 (1%) lower than the previous quarter. The Q4 2024 price was £39 ($48.31), or 11% higher than the same period in 2023.
When adjusting for inflation, average combined household buildings and contents premiums are below levels observed between Q1 2013 to Q4 2017, where inflation adjusted premiums were consistently above £405 ($501.69). Meanwhile, the equivalent average claim paid is 51% more expensive than in Q4 2017.

“Our latest data serves as a blunt reminder of the devastating damage that adverse weather can cause to people’s homes and businesses. Insurers are braced for these sorts of events at any time – but prevention is always better than cure,” commented Mark Shepherd, head of General Insurance Policy at the ABI, in a statement.

“That’s why we continue to advocate for climate resilience measures to be carefully considered in all planning decisions and building standards, to ensure properties are fit for the future and that they are not built in areas prone to climate risk,” he said. “We’ve also long stressed the need for government to further invest in flood defence and maintenance, and to take swift action on mitigating surface water flooding.”

Flood defenses can save households alone £1.15 billion by mitigating damage each year, the ABI said, citing research from Fathom that was commissioned by Flood Re. Flood Re is Britain’s insurer-funded reinsurance program, which aims to make home insurance more affordable.

Previously commissioned research (published in 2021 by the ABI, Flood Re and flood specialist JBA) revealed that for every £1 spent on flood defense maintenance, £7 is saved in capital spend.

“While we welcome the government’s recent uplifted investment in flood defences, we want it to commit to an annual investment of at least £1 billion a year from 2026 onwards,” according to Chris Rumsey, head of Public Affairs at the ABI.

“This crucial investment is needed to help protect people’s homes and businesses, and to ensure that the UK keeps pace with adapting to our changing climate,” he added.

Top photo: Residents wade through flood water in Loughborough, Leicestershire after rain and strong winds from Storm Henk lashed large parts of the UK, Wednesday Jan. 3, 2024. (Callum Parke/PA via AP)

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