Insurance firms grit their teeth as the darker winter weather heralds a likely increase in claims

On 30 October 2022, sleepy Brits were rewarded with an extra hour of kip as British Summer Time moved back an hour to become Greenwich Mean Time, accommodating the darker winter weather.

Katie Scott_bw_path

Katie Scott

Although the majority of the UK enjoyed the hour rollback as additional snoozing time, many within the insurance industry are now on tenterhooks due to the darker weather heralding the arrival of increased claims potential.

For example, after looking back at its own data from the past three years, insurer Axa UK reported at the end of October that motor insurance claims frequency typically increases by around 7% across the three days following the clocks going back, costing approximately £2,230 per claim.

The insurer additionally noted an increase in minor motor collisions during morning and evening rush hours after the reintroduction of Greenwich Mean Time, as drivers get used to driving in the dark again.

Loss adjusting firm Sedgwick has observed similar trends based on its internal data from the last three years.

Its analysis, shared with Insurance Times at the end of October 2022, showed that property theft claims volumes tend to increase following the end of British Summer Time – when the clocks go back, daily theft claim volumes typically increase by 15.4% on average, the company said.

This has a knock-on cost implication for insurers, Sedgwick added. It noted that daily incurred claims costs increased by 18% when claims occurred in Greenwich Mean Time, compared to British Summer Time.

Susan Sansom, director of project managed adjusting at Sedgwick, said: “This shift in daylight hours has a considerable effect on theft claims. Given the extended cover of darkness after working hours, based on our analysis from previous years, we expect to see a significant increase in theft claims.”

H&H Insurance Brokers has also issued a warning to its farming sector clientele. It believes rural properties and agricultural businesses typically become prime targets for thieves, who take advantage of the cover of darkness to steal items such as tractors, quad bikes, tools, diesel and fertilisers.

Thanks to the cost of living crisis, opportunistic fraud – such as crash for cash scams – and theft may suddenly feel like an attractive solution for cash-strapped consumers. Both insurers and brokers need to be on their guard to help inform and protect their customers from these possible risks.

With inflation already driving up rates and claims costs, the last thing the industry needs is additional claims frequency and insurance fraud adding to the financial burden across the value chain.