Mohammad Khan, general insurance leader at PwC, said: "This is clearly a very difficult time for those who have been impacted by the floods. However, the UK insurance industry is better prepared for the floods that have occurred and is responding as quickly as possible to ensure that affected policyholders are having their needs met.
"Due to the number of significant floods that have unfortunately occurred since the flood in 2007, the industry is much better prepared in helping affected policyholders quickly in dealing with this extreme weather.
"Although it is still early to estimate the full losses from these floods, the losses to date could see the insurance industry paying out between £80m and £120m in claims for both people's homes and affected businesses. This estimate could rise over the coming days depending on how much further rain falls over the rest of the week."
Will this have an impact on insurance premiums that policyholders pay? Before we had Flood Re - the joint initiative between the UK Government and the insurance industry to make the flood part of household insurance more affordable - policyholders that were flooded saw significant increases - sometimes by thousands of pounds - in insurance premiums.
PwC would not expect to see anywhere close to this level of premium increase for flood affected policyholders. Those policyholders who shop around may be able to match their current premium, but most could see a modest increase in price.
Mohammad Khan, general insurance leader at PwC added: "Currently the household insurance market is very competitive with many insurers trying to grow their share of the sector. These firms are often writing premiums for new policyholders at a loss to bring in new business despite household insurance claims costs rising in recent years. Given the competitiveness of the sector, non-flood affected customers who shop around may be able to match last year’s premiums.”
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