Property and casualty insurers in the UK paid £4.1 bn in insurance claims during the 9M 2024, marking a record for that period, according to the Association of British Insurers (ABI). Weather-related incidents significantly drove these payouts.
In the Q3 alone, insurers paid £1.3 bn in claims, following £1.4 bn in the Q2. Insurance claims in 2024 rose by 15%, or more than £500 mn, compared to the same period in 2023.
Adverse weather remains a major factor in the increase in home insurance claims, with Q3 payouts up £200 mn year-on-year.
Record-High Payouts
The average home insurance claim reached £6,002 in Q3 2024, up 13% from the second quarter and 33% higher than the same period in 2023.
Damage from storms, heavy rain, and frozen pipes totaled £136 mn in Q3, marking the sixth consecutive quarter of weather-related claims exceeding £100 mn. Business claims for weather damage rose to £90 mn, up 4.5% from Q2 and 28% year-on-year.
Industry Challenges and Recommendations
For every $1 collected in premiums in 2023, insurers paid $1.18 in claims, according to an EY report cited by the ABI. This continues a trend from 2022, where payouts reached $1.22 for every $1 in premiums.
Louise Clark, ABI policy adviser, urged greater investment in flood defense and surface water management. She called for halting construction on flood-prone land and integrating flood prevention measures into planning and building standards to enhance climate resilience.
Insurers continue to be at the forefront of climate change, supporting communities impacted by extreme weather to recover as quickly as possible
Louise Clark, policy adviser, ABI
“We know premiums are putting pressure on household budgets and, as an industry we’re determined to play our part in tackling the cost pressures behind them”, Louise Clark said.
“We also need to see swift action on surface water flooding, and an immediate end to building on land that is at a high risk of flooding. Flood prevention and resilience measures must be considered in all planning decisions and building standards to make sure all new buildings are climate resilient.”
EY projects continued losses in 2024, making it the fifth consecutive loss-making year for property insurers.
The ABI highlights the pressing impact of climate change and the financial strain on households, while calling for coordinated action between insurers and the government to mitigate risks and costs.
