British insurers are facing severe financial exposure as high summer temperatures cause soil under residential properties to dry out and shrink, leading to extensive structural foundation damage. Domestic claim payouts climbed to £72 million between April and June as the average cost of resolving an incident rose to £20,000. While the peak surge ran through autumn, firms like Aviva absorbed the hit thanks to a 19% rise in third-quarter general insurance premiums to £11.8 billion.
Key points
Extreme seasonal heat is driving unprecedented structural damage claims that disrupt trad…: Extreme seasonal heat is driving unprecedented structural damage claims that disrupt traditional property underwriting cycles.
Industry-wide foundation repairs are becoming substantially more expensive as average cla…: Industry-wide foundation repairs are becoming substantially more expensive as average claim costs reach unprecedented levels.
Insurers are currently offsetting elevated climate-related property payouts through stron…: Insurers are currently offsetting elevated climate-related property payouts through strong double-digit growth in general premiums.
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The UK’s largest insurer has been hit by a rise in subsidence claims after an extremely hot summer left households across the country grappling with the fallout from the growing climate crisis.
Aviva said on Friday it had experienced the jump amid an industry-wide surge in households filing subsidence claims with their insurers to cover repairs, which typically are needed to address cracks, sloping floors, and off-kilter doors and windows.
It follows two record hot summers in the UK; August this year was the joint hottest month ever recorded around the world. Those drier summers cause the ground under houses to shrink, which undermines a property’s foundations. It then expands in wetter winters, which can further damage homes.
Aviva experienced a “peak subsidence period” between July and September, with claims continuing into October, chief executive Amanda Blanc told Bloomberg in an interview on Friday. Aviva would not provide any further detail on the scale of the increase in claims.
Blanc said homeowners could reduce the risk of subsidence by keeping a close eye on drains, pipes and gutters, and fixing…
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