Insurers pay out £585mn for UK weather claims in 2024: ABI

By Ryan Hewlett

Feb 10 - (The Insurer) - Insurers paid out £585mn ($723.9mn) for weather-related damage to policyholders’ homes and possessions in the UK over 2024, according to new data from the Association of British Insurers (ABI) which issued a fresh call on government for greater investment into risk mitigation measures.

• UK weather-related claims costs spike 26% YoY to record £585mn

• Total property claims in the fourth quarter of 2024 were £1.6bn

• Annual property claims total jumps to record £5.7bn

• ABI calls for annual investment of £1bn a year in flood defences

The claims tally is the largest since the ABI started recording data in 2017 and follows significant and consistent bad weather, including 12 named storms in the 2023/2024 storm season – the most named storms since 2015/2016.

Claims for damage to homes from windstorms, flooding and frozen pipes in 2024 surpassed the previous 2022 record for the same claim types by £77mn. The figure is also £127mn, or 28 percent higher than the weather-related claims payouts for 2023.

Total property claims in the fourth quarter of 2024 were £1.6bn, and took the annual claims total to £5.7bn – the largest amount paid out in any year on record.

The latest claims data from the ABI also reveals that claims for damage to homes from adverse weather reached £146mn in the fourth quarter of 2024 – making it the seventh consecutive quarter that weather-related claims have been above £100mn.

The quarterly claims figure is also £17mn more compared to claims paid for the same type of damage in Q4 2023.

UK insurers paid out £102mn to businesses for weather-related damage and business interruption during the final quarter of the year. This is an increase of 7 percent on the previous quarter, and 16 percent on Q4 2023.

Mark Shepherd, head of general insurance policy at the ABI, said: “Our latest data serves as a blunt reminder of the devastating damage that adverse weather can cause to people’s homes and businesses. Insurers are braced for these sorts of events at any time – but prevention is always better than cure.

“That’s why we continue to advocate for climate resilience measures to be carefully considered in all planning decisions and building standards, to ensure properties are fit for the future and that they are not built in areas prone to climate risk. We’ve also long stressed the need for Government to further invest in flood defence and maintenance, and to take swift action on mitigating surface water flooding.”

The ABI noted that the high claims costs had an impact on premiums, as the annual average price of combined building and contents home insurance in 2024 went up by £55, or 16 percent, compared to 2023.

ABI: Funding essential to flood risk management

The influential trade body also urged the government to ensure that adequate annual investment is allocated to flood defence maintenance projects.

Within the ABI’s submission to government’s ongoing Spending Review, the trade body called on policymakers to include flood defence maintained investment as part of the new funding formula.

The ABI cited research by Fathom, commissioned by Flood Re, which shows that flood defences can save households alone £1.15bn by mitigating damage each year. Previous commissioned research reveals that for every £1 spent on flood defence maintenance, £7 is saved in capital spend.

Chris Rumsey, head of public affairs at the ABI, added: “While we welcome the government’s recent uplifted investment in flood defences, we want it to commit to an annual investment of at least £1 billion a year from 2026 onwards. We also urge the government to set out a longer-term funding plan within the spending review. This crucial investment is needed to help protect people’s homes and businesses, and to ensure that the UK keeps pace with adapting to our changing climate.”