Storm Henk will spike insurance claims this time, but extreme weather events require longer-term thinking

Storm Henk will undoubtedly cause a spike in insurance claims, but response to rising extreme weather events require a new approach going forward, experts have warned.

The storm that battled the UK this week has caused flooding, damaged property and delays to travel as a result of rain and winds up to 80mph.

This will cause a spike in insurance claims as people will likely claim their policies if their property or cars were damaged.

Patrick Hayward, senior consultant and claims lead at Altus Consulting noted: “At the moment, it is very difficult for insurers to absorb any of the impact of damages caused by extreme weather, as they are already grappling with challenging loss ratios, following persistent and sustained cost inflation in property claims.”

Hayward explained that “extreme weather events such as Storm Henk do inevitably affect insurance premiums, causing them to rise”.

The insurance market, particularly the car insurance market, has been battling record payouts as the sector has been battling rising costs.

Pete Allchorne, president of the Forum of Insurance Lawyers and partner at DAC Beachcroft explained that data from the Association of British Insurers suggests that the total cost of claims paid out to support customers due to storm Babet, Ciaran and Debi that struck in October and November 2023 will be in the region of £560m.

Hayward believes insurers are making efforts to address the problem of extreme weather events.

“However the majority are signed up to the Flood Re Build Back Better scheme, under which home insurers fund home repairs which focus specifically on improving future resilience to storms, rather than reinstating the same vulnerabilities and inviting history to repeat itself,” he added.

Allchorne explained that the response of rising extreme weather events requires joint initiatives between Government and insurers, such as in relation to the affordability of flood cover.

He explained: “FloodRe is a good example of this, but there is always more that can be done to support insurers and consumers alike.”