The winter storms that have battered Britain will cost the country’s leading household insurers more than £300m this year, but customers will escape an increase in insurance premiums to cushion the damage, a bank said.
The non-life insurers RSA, Direct Line and Aviva – which together control 39 per cent of the home insurance market– will suffer total net losses of between £150m and £308m after three storms wreaked havoc across the UK last month, analysts at the investment bank UBS said.
The floods have revealed the imbecility of Osborne’s economic strategy
But UBS predicted that robust competition in the household insurance sector, falling premiums and the introduction of a new insurance regime for affected customers would not “turn the market” towards higher premiums.
The bank also forecast that the total cost of the floods to all UK insurers would rise to £2.5bn, after Storm Frank caused an estimated £1bn more damage last week. The auditor KPMG had previously estimated a £1.5bn loss to insurers from storms Desmond and Eva.
PwC has also raised its forecasts for the costs of the storms, saying the economic impact on the UK would be between £2bn and £2.8bn, with combined insurance losses of between £1bn and £1.4bn. It had previously forecast insurance losses of £900m to £1.2bn.
Separately, the reinsurer Munich Re said that about 94 per cent of claims stemming from natural disasters around the world last year were weather-related.
Insured losses fell to $27bn (£18bn) from $31bn in 2014 after the El Niño weather system reduced the impact of hurricanes in the north Atlantic but led to larger storms in the north-eastern Pacific such as Hurricane Patricia – the largest ever recorded.
Source Independent