Insurers in the UK paid out a record £585 million for damage caused by severe weather events in 2024, including windstorms, flooding, and frozen pipes, according to data from the Association of British Insurers (ABI). This marks a significant increase from previous years, with payouts for weather-related claims surpassing the 2022 record by £77 million and rising £127 million above the total for 2023.
The unprecedented weather events included 12 named storms—the highest number since the 2015-16 storm season. These storms contributed to the record payout, as insurers attributed the rise in claims to “significant and consistent bad weather” throughout the year.
The Met Office’s analysis points to climate change as a key factor behind the growing frequency and intensity of such storms. This trend has driven up insurance premiums worldwide, especially in areas vulnerable to extreme weather events like hurricanes, floods, and fires. In the UK, home insurance premiums increased by 16% in 2024, with the average annual cost for combined building and contents insurance rising by £55 to £395.
The rising cost of weather-related claims comes at a time when concerns about building in flood-prone areas are increasing. A report revealed that more than 100,000 new homes are set to be built in high-risk flood zones across England over the next five years. Insurers have raised alarms, urging that homes should not be constructed in areas vulnerable to climate-related risks whenever possible.
Mark Shepherd, head of general insurance policy at ABI, emphasized the devastating impact of adverse weather on homes and businesses. He stated that while insurers are prepared for such events, prevention is the key. He called for improved climate resilience measures in planning and building standards to ensure homes and businesses are better equipped for future weather challenges. He also stressed the need for increased investment in flood defence systems and maintenance, noting that every £1 spent on flood defences could save £7 in future capital costs.
In response to the growing flood risks, the UK government has committed to increasing flood defence spending to £2.65 billion over the next two years. However, the ABI has called for further guarantees, urging the government to allocate at least £1 billion annually for flood defences starting in 2026.
Additionally, businesses have also been significantly impacted by the extreme weather, with insurers paying out £102 million for weather-related damage and business interruptions in the final quarter of 2024. This represents a 7% increase from the previous quarter and a 16% rise compared to Q4 2023.
Stay tuned to London Pulse News for more updates on how climate change is affecting insurance, housing, and government action on extreme weather.
