Context
The ABI, supported by its own research data and data gathered by Fathom for Flood Re, has called on the government to commit £1bn of investment every year for flood defences after the industry made record pay-outs for weather-related claims in 2024, compared to when data first started to be collected in 2017. Insurers paid out a record £585m for weather-related damage to people’s homes and possessions in 2024, £127m (28%) higher than the weather-related claims pay-outs for 2023.
Key points to note and next actions
- The data gathered for Flood Re suggests flood defences can save households alone £1.15bn by mitigating damage each year.
- Previous research indicates that for every £1 spent on flood defence maintenance, £7 is saved in capital spend.
- For the final quarter of the year, claims for damage to homes from adverse weather reached £146 million – making it the seventh consecutive quarter that weather-related claims have been above £100m.
- Insurers also paid out £102m to businesses for weather-related damage and business interruption during the final quarter of the year.
- EY figures show that in 2023, for every £1 property insurers received in home insurance premium, they paid out £1.18 in claims. This follows on from another loss-making year in 2022, when insurers paid out £1.22 in claims for every £1 received in premiums. EY also expects further losses in 2024 – making it the fifth year in a row that property insurers will pay out more in claims than they receive in premiums.
- High claims costs have an impact on premiums, as the annual average price of combined building and contents home insurance in 2024 went up by £55 (16%) to £395, compared to 2023