UK property insurance claims are expected to reach their highest level since 2007, demonstrating the threat of climate change on the industry, analysis from Deloitte shows.
They are expected to hit £5.5 billion for 2024, the highest payout since 2007, which was a year that saw numerous summer floods.
James Rakow, insurance partner at Deloitte, said: “Our analysis and expectations show that 2024 will be the most expensive year for property insurers since the summer floods of 2007.
“With extreme weather events such as storms and flooding becoming more commonplace in the UK and beyond, insurers likely won’t be surprised by this.
“As the final claims for 2024 are counted, insurers will be assessing the impact of weather events during the final quarter and working out what the potential impact on their trading plans and consumers’ premiums will be.
Claims specifically related to weather (floods, storms, freeze, subsidence) are likely to reach £1.2 billion for 2024, double the annual levels seen between 2017 and 2020.
Meanwhile weather claims will make up 22% of the total amount paid out by UK property insurers in 2024.
Rakow added: “Weather wise, 2025 has not got off to a great start. We’re less than two weeks into the year, and due in large part to flooding, insurers have already likely seen the levels of adverse weather claims that they would ordinarily expect for the whole month.
“Learnings from 2024 and early 2025 will show that insurers have tough choices to make, with weather events associated with climate change a real and present danger. Insurance executives will be working hard to balance the needs and expectations of customers, regulators, markets and shareholders.”