Calls for infrastructure investment as weather-related insurance claims hit new high

UK weather-related insurance claims reach a record £573m last year, according to figures published by the Association of British Insurers.

This is the highest on record and 36% greater than 2022 (£421m).

Property insurers paid out the equivalent of £13m every day last year to help homeowners and businesses cope with unexpected and unwanted events like flooding and theft.

The figures have prompted calls from insurers for the government to invest further in flood defences. 

In total, the industry paid out £4.86bn to homeowners and businesses in 2023.

More than half of this figure - £2.55bn – was for home insurance claims. This is a near 10% increase on 2022 totals (£2.33bn) and has been driven by weather-related damage. 

While the total number of claims remained fairly level, the average claim paid to businesses and homeowners rose to £6,235, a 11% increase compared to 2022.

And when adjusted for inflation, average claim costs have risen while premium prices have fallen in real terms.

Adverse weather played a huge part in the rise in home claims.

This massive rise was largely fuelled by the succession of storms, including Babet, Ciaran and Debi that struck last autumn. 

Homeowner storms damage claims (high winds and debris) totalled £133m but subsequent flooding added £286m and represents half of all weather-related claims. 

A further £153m of weather claims came from burst pipes, most of which was incurred in the first three months of 2023 at the tail end of a cold winter. 

Weather wasn’t just a problem for homeowners either, with businesses incurring £443m in weather damage claims in 2023 - though fire remains the primary peril to businesses (£880m).

Louise Clark, policy adviser at the ABI, said: “Extreme weather events may not feel so rare as they used to as we grapple with a changing climate.

“Insurers continue to be there for affected homeowners, with payouts hitting record levels after a particularly difficult autumn and winter with seemingly countless storms, from Agnes onwards leading to significant flooding.

“While insurance will continue to protect homeowners and businesses, we can’t afford to lose momentum on our flood defence programme, and we continue to press the government for further investment in flood defence and maintenance, as well as calling for changes to the planning system to discourage building where flooding might be more likely.”

The Association for Consultancy and Engineering (ACE) said infrastructure resilience was key in the face of challenging weather conditions. 

Director of policy, Guto Davies, said: “Adverse weather is becoming more recurrent in the UK. 

“This means we need to think more about how we make existing and new infrastructure more resilient. 

“Our members have many of the answers such as nature-based solutions and other innovations. 

“The sticking point is to make their expertise viable in the market, and ensuring we have a fair and proportionate approach to risk which encourages innovation. This is a key priority for our members.”