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After the storm…
UK insurers now face the costs of the unusual run of winter storms and floods across the UK. The severe winter weather began with St Jude storm of 27 and 28 October, and included several storms in December such as the tidal surge storm (called Storm Xaver by some) that caused so much coastal flooding in Wales and also the east coast of England.
It isn’t yet known exactly how much the severe weather will cost UK insurers. Many insurance companies expect to release their annual reports in the coming weeks. What is know is that such a series of storms hasn’t been seen in UK since 1990, and the accumulative losses of such a sequence of disasters could well be significant, though costs are unlikely to be as high as the UK floods of 2007. The Daily Telegraph has suggested that the severe weather of 2013 will costs UK insurers at least £400 million. The list of cities, towns and villages affected is a long one. Areas such as Somerset and Oxfordshire, which were badly hit in the 2007 floods, have been under water for several days if not weeks. Wealthy areas in the south of England such as Surrey, have also suffered from the recent spate of floods.
One problem now for property owners and insurers alike is that the ground in many areas of the UK is so saturated after moths of heavy rain, any further rain – even normal levels – could cause further flooding.
Fortunately for UK household insurance companies, the weather in 2013 up until October and the St Jude storm, was fairly benign, which would have been reflected in low levels of household insurance claims.
Earlier this month, the German insurance industry body, GDV, announced that the flooding in June 2013 that affected much of Germany are likely to costs insurers around 1.3 billion euros, and that the severe weather that hit Germany overall in 2013 will cost 7 billion euros. One of the costliest weather events in 2013 for German insurers was a severe hail storm in southern Germany that caused substantial damage to property but in particular vehicles.