Insurers paid out a record £585 million for weather-related damage to people’s homes and possessions in 2024,1 according to the latest data from the Association of British Insurers (ABI).2 The record claims come following significant and consistent bad weather, including 12 named storms in the 2023/2024 storm season - the most named storms since 2015/2016.3 Claims for damage to homes from windstorms, flooding and frozen pipes in 2024 surpassed the previous 2022 record for the same claim types by £77 million. The figure is also £127 million (28%) higher than the weather-related claims payouts for 2023. Total property claims in the fourth quarter of 2024 were £1.6 billion,4 and took the annual claims total to £5.7 billion – the largest amount paid out in any year on record. The latest claims data from the ABI also reveals:
- For the final quarter of the year, claims for damage to homes from adverse weather reached £146 million – making it the seventh consecutive quarter that weather-related claims have been above £100 million. The quarterly claims figure is also £17 million more compared to claims paid for the same type of damage in Q4 2023.
- Bad weather wasn’t just a problem for homeowners, as insurers paid out £102 million to businesses for weather-related damage and business interruption during the final quarter of the year. This is an increase of 7% on the previous quarter, and 16% on Q4 2023.
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.
Mark Shepherd
Head of General Insurance Policy at the ABI
Funding essential to flood risk management
Within the ABI’s submission to the Spending Review, the trade body has urged the Government to ensure that adequate annual investment is allocated to flood defence maintenance projects as part of the new funding formula. Research by Fathom, commissioned by Flood Re, shows that flood defences can save households alone £1.15 billion by mitigating damage each year,5 and previous commissioned research reveals that for every £1 spent on flood defence maintenance, £7 is saved in capital spend.6
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.
Chris Rumsey
Head of Public Affairs at the ABI
Premiums impacted by claims costs 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 (16%) to £395, compared to 2023.
The latest quarterly premium data from the ABI reveals:
- The average price of a combined household buildings and contents policy in Q4 2024 was £403 – £4 (1%) lower than the previous quarter but £39 (11%) higher than the same period in 2023.
- When adjusting for inflation, average combined household buildings and contents premiums are below levels observed between Q1 2013 to Q4 2017, where inflation adjusted premiums were consistently above £405. Meanwhile, the equivalent average claim paid is 51% more expensive than in Q4 2017.7
ENDS
Notes to editors
EY figures show that in 2023, for every £1 property insurers received in home insurance premium, they paid out £1.18 in claims. This follows on from another loss-making year in 2022, when insurers paid out £1.22 in claims for every £1 received in premiums. EY also expects further losses in 2024 – making it the fifth year in a row that property insurers will pay out more in claims than they receive in premiums.
Links:
1. Since the ABI started collecting the data in 2017. 2. The ABI’s Property Insurance Premium and Claims Tracker is the most comprehensive in the UK, analysing nearly 28 million policies sold a year. It’s also the only collection that is based on the price customers pay for their cover rather than what they are quoted (which typically delivers higher averages). More on this in our blog. 3. Met Office summary of named storms from the 2023/24 storm season in the UK. 4. Commercial and domestic property policies