Insured losses from United Kingdom storms could hit £1.2bn: PwC

Insured losses from United Kingdom storms could hit £1.2bn: PwC

That "could breach £1.5bn" if further rainfall causes more floods, PwC said.

"Traditionally, commercial lines insurance claims have made up approximately 10% to 30% of the total insured loss claim". The city of York remains under water, however levels are now thought to have peaked this morning.

The economic impact of the storms Desmond and Eva, which have caused widespread flooding across northern England, has been estimated at around £1.3bn (€1.8bn, $1.9bn).

The flooding caused by Storm Eva, which swept northern England over the Christmas weekend, and Storm Desmond, which hit Cumbria and Lancashire earlier in December, could wipe up to 0.2% off the UK's economic output this year, according to consultancy group IHS. "We are assessing this month's events through a number of economic lenses, resulting in an initial total cost estimate of £5-£5.8 billion".

"After Saturday's torrential rain, and with rare "danger to life" warnings issued, the economic damage to the United Kingdom could be significant", said Mohammad Khan, general insurance leader at PwC.

The Environment Agency said Britain had faced an extraordinary period of severe weather and flooding in December, with consultants PwC warning that the latest deluge from Storm Frank could take total losses above 3 billion pounds.

Many areas that were affected during Storm Desmond have been flooded again.

This is slightly above its previous "very initial" insured loss estimate of £700mn-£1bn ($1.0bn-$1.5bn), released last week.

"The additional damage from Storm Eva and any further damage caused by additional rain will impact relevant insurers' year-end profitability". Given that Storm Frank is ongoing it is too early to tell what the full impact will be. Domenico Del Re, head of catastrophe management at PwC, said that more could be done to improve the response to flooding.

"Following the 2007 floods, a lot of work was undertaken on flood defenses but clearly more can be done. Flood defences can not stop everything, as they are based on historical information, but a lot more information exists today than there was even five years ago", he stated.

Insurers are facing some of the costliest British floods on record following the two storms. But the scheme, Flood Re, does not cover small businesses.

Insurance companies are set to bear much of the total cost of the flooding, somewhere between £700 million and £1 billion of the total cost so far.

Related News: