PwC have today announced a revised estimated cost of the economic damage sustained by the continuing UK floods.
Mohammad Khan, insurance partner at PwC, commented:
"Although there was a lot of rain in January and clearly people have been adversely impacted, the damage to the UK was not nearly as bad as the damage caused by the weather in December. However, we have revised our total cost estimates upwards, taking into account the January weather. Our expectations are that the insurance industry will have up to £500m of costs from the January and December weather and the economic damage will be £630m.
Given the weather forecasts for this week and further into February, we would expect further flash flooding and for these estimated costs to rise.
It is too early to tell whether the weather will have an impact on insurer results for next year. Last year, the weather was very benign from January to October and insurers' results from household and commercial property business were positive, even allowing for the December storms and floods."
Dom Del Re, insurance catastrophe expert at PwC, added:
"The continued adverse weather highlights the impact that storms, coastal and river flooding, and flash flooding can have on the British economy and the UK insurance industry. In past flood events, such as the summer 2007 floods, business claims made up around 25% of the total claims. Claims arising from business interruption could be a significant driver of the overall insured loss. Home and business owners who have planned for flooding will be better equipped to deal with the disruption and damage. Policyholders continually impacted by flooding - even those not in traditional flood plains - should consider taking remedial action on their properties to help mitigate and prevent damage caused by flooding."
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