Changing Weather and the Impact on the UK Insurance Market

CHANGING WEATHER PATTERNS LEAD TO INCREASED INSURANCE PREMIUMS FOR UK BUSINESS OWNERS

The impact of changing weather patterns in the UK has impacted both insurers and the reinsurance sector, leading to increased costs for business owners.

The increased risks associated with shifting weather patterns and more frequent extreme weather events is impacting UK insurers through higher payouts and rising reinsurance costs. For business owners it is now more important than ever to get the advice of an experienced insurance broker who will take the time to understand your individual risks and search the market for the most comprehensive cover at the best value price.

Insurance payouts have increased to cover extreme weather-related events. Claims for flooding damage in the UK between 2000 and 2019 led to over £5 billion in insurance claims payouts, with winter flooding between 2015 and 2016 alone responsible for payouts exceeding £1.3 billion.

The increase in the frequency of extreme weather events has also impacted risk modelling and calibration, as it becomes harder to accurately predict weather related risks. In response to the increase of extreme weather events and uncertainty around risk calibration, reinsurance costs have also increased which further financially impacts UK insurance companies.

These factors create market conditions in which it is more difficult and expensive for clients to find the necessary cover for weather-related risks. Despite these challenges it is important for business owners to consider the potential impact of weather-related damages their business without adequate insurance cover.

There are many benefits to ensuring your business has adequate risk cover for weather-related events including:

Financial protection

Having adequate insurance cover in place for weather related events can protect your business from paying out of pocket (often unaffordable) out of pocket costs to repair all damages, rebuild premises and replace contents and/or stock.

Structure and infrastructure

Aside from the immediate, direct impact of extreme weather events (e.g. damage to building and stock) it is important to have wider cover for key business operations that may be impacted so these can resume as quickly as possible.

Business disruption

If your business is unable to resume trading immediately following weather related damages, cover for business disruption can be invaluable. Business disruption can be incredibly costly to businesses and comprehensive cover can help with costs such as alternative business premises, employee wages and the costs associated with supply chain disruptions until your business can return to pre-loss turnover levels.

Peace of mind

Business owners face many risks and uncertainties, but having the right cover in place to protect your business can provide some peace of mind that financial protections are in place should your business be impacted by extreme weather. Tysers has many years’ experience in providing insurance cover for businesses of all sizes, across a wide range of sectors. Our experienced brokers will review your individual risks and search the market to find the best value cover, whilst ensuring your business has adequate protection.

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