By Caroline Elliott-Grey, senior product manager, LexisNexis Risk Solutions
What may come as a surprise, however, is that since 1998, the UK has experienced six of its wettest 10 years, with the last 18 months soaking the country with record rainfall.
When this rain is accompanied by high winds, the result is a storm.
Stormy weather
In the UK, a storm is named when it has the potential to cause disruption or damage which could result in an amber or red weather warning. This is based on information from the National Severe Weather Warnings Service which looks at the impact the storm could have and the likelihood of those impacts taking place.
The UK has already seen ten storms this year despite only being halfway through the storm season. Putting this in perspective, in 2021-22, there were seven storms and the year before there were five. The big increase shows the frequency with which insurance providers must now anticipate these events and factor them in when shaping policies.
And there is a lot to consider. Figures recorded during Storm Babet in October last year paint a worrying picture. In a period of just 36 hours, over 100mm of rain fell, pushing the River Rother to a streamflow of 118 cubic meters per second and flooding 1,250 properties in England alone.
Maximum gust speeds are also increasing with the rising frequency of storms and the ABI expects future insured losses to go up by 18% in the next 100 years.
This continual growth in storm occurrence and damage caused drives a real need for data in the market. Without having a reliable source at hand, insurance providers are underprepared for the risks associated with windstorms and are likely to see losses go up.
When a storm occurs flooding tends to follow.
Today, 325,000 English properties are situated in areas at the highest risk of surface flooding but, with the MetOffice projecting 30% wetter weather in the years to come, a total of 5.2 million homes and businesses are at danger of future flooding.
Flooding caused by Storm Babet, for example, impacted over seven thousand commercial properties and some 51K residencies. Rising sea levels can also be a major cause of flooding in the UK. In the past 30 years, the sea level has risen by 11.4cm, demonstrating that it is not just surface water that can trigger a flood.
The decrease in permeable surfaces must also be taken into account when considering the risks of floods. Flash floods are becoming a regular occurrence in many urban, high-density areas due to the reduced permeability of surfaces, clay soils, and ageing drainage and sewage systems. And they are only going to get worse as extreme rainfall events could be four times as frequent by 2080 compared to the 1980s. Individual claims can amount to over £100,000 for ‘super basements’ that have been excavated in high-end homes for parking, home cinemas and so on, containing high-value possessions. Approximately 7,000 basements were excavated between 2008 and 2019, further decreasing the ability of the soil to absorb water and increasing risks like subsidence.
Predicting risk cannot just rely on surface water flood scores. The extreme flooding in the capital in 2021 for example, amounted to insured losses estimated to be over £100 million as the overloaded drainage system backed up into properties with basements causing major losses to stock, business interruption, and water damage.
Geospatial intelligence data can be an ally in tackling climate risks
The best opportunity insurance providers have to make a full, fast and accurate assessment of perils risk for an individual address not just a postcode, is by leveraging geospatial intelligence datasets. The most common risks, such as subsidence, flooding and windstorms are top of the list but this data must also encapsulate fire, crime, terrain and nature. This will give insurance providers a holistic view of property risk for pricing and underwriting and help identify customers at most risk. For example, the LexisNexis® Windstorm Model helps to predict the maximum wind gust speeds as a better predictor for property and structural damage compared to sustained wind speeds.
Understanding property risks is an important part of the process, so this intelligence needs to be delivered in a way that’s swift and simple, as data enrichment at the point of quote, mid-term adjustment and renewal. This helps home insurance, commercial insurance and motor insurance providers more accurately assess the level of risk to a property or a vehicle across the U.K.
And geospatial insights are not limited to larger brokers, insurers and MGAs. Smaller brokers can now access simplified perils risk scores for flood, subsidence and crime, plus details on property characteristics – bringing them more in line with the rest of the market.
The depth, breadth and accessibility of geospatial intelligence data is growing in response to our changing climate, helping insurance providers better understand, predict and mitigate environmental risks for their customers today and tomorrow.
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