Britain’s leading insurance companies have reported a significant rise in insurance payouts, reaching their highest level in seven years due to increased damage from extreme weather events.
The Association of British Insurers (ABI) revealed that payouts in the second quarter of the year totaled £1.4 billion, marking a 5% increase from the previous quarter and the highest figure recorded since 2017.
The ABI attributed the surge in payouts to a sharp rise in weather-related claims, with damages to UK homes from storms, heavy rain, and frozen pipes alone amounting to £144 million.
This marks the fifth consecutive quarter where weather-related claims have exceeded £100 million, highlighting the growing financial burden on the insurance industry caused by the climate crisis.
The UK has experienced unusually severe weather in the first half of the year, including four named storms and the wettest spring since 1986.
Rising weather-related insurance claims hit £1.4bn, highlighting the growing impact of climate change on Britain.This adverse weather has not only led to increased insurance claims but has also negatively impacted the economy by deterring consumer spending on the high street.
Extreme weather events are becoming more frequent and severe globally, with devastating financial consequences for insurers.
Last month, Hurricane Beryl caused widespread destruction in the Caribbean before reaching the southern United States, resulting in billions of dollars in damages.
Louise Clark, a policy adviser at the ABI, emphasized the need for government intervention to reduce the country’s vulnerability to such events.
She called for reforms to the planning regime to prioritize prevention and resilience measures against the impacts of climate change.
Clark also stressed the importance of maintaining flood investments and addressing surface-water flooding to mitigate future risks.
With insurance payouts on track to surpass last year’s total of £4.9 billion, the industry faces rising costs.
Despite these challenges, insurers remain committed to supporting their customers during difficult times, ensuring that home insurance continues to provide essential protection.