In response to reports around parts of the UK being hit with severe floods and landslides. PwC is warning insureds that flooding and consequent claims could impact premiums in flood areas.
Says Mohammad Khan, insurance partner at PwC: "If the weather reports for the coming few days are wrong and we have more rain...it could unfortunately lead to more flooding and landslides.
"This time five years ago the UK experienced some of the worst floods in a generation. Losses to insurers in June 2007 alone amounted to £1.25bn. We do not expect the current flooding to be as significant as this, but these figures are a stark reminder of how severe flood insurance losses can be.
"Given that the flooding and landslides are ongoing, it's difficult to currently ascertain the impact on insurers. Insurers do hold reserves for flooding during the year so it is possible that they can tolerate the impact of the current floods. However, if the rain and therefore the flooding and landslides continues, it will impact insurers' results, which will have a knock-on effect on premiums in the areas affected by flooding."
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