ISL estimates £100m claims arising from last week's cold snap using new analytical tool

The recent cold snap will cost £100m in freeze claims, according to a new analytical tool.

Risk analysis data supplier ISL used its new winter freeze model to estimate the cost of last week's chilly conditions.

ISL director Mark Harrison said freeze claims accounted for 30% of weather claims.

"In 2000, freeze claims accounted for £220m in claims in the UK," he said.

"We estimate that the recent cold snap will eventually result in industry losses in the order of £100m, on top of recent flood losses that we estimate to be about £70m."

The ISL model uses daily temperature figures from the past 20 years, altitude, topography, windchill, housing density and shade to identify freeze-prone areas.

It combines the statistics with an assessment of housing vulnerability in each street to work out the likelihood of claims being incurred and the expected damage.

"The lowest recorded temperatures on record are Braemar in Scotland in February 1895 at minus 27.2C and Newport in January 1982 at minus 26.1C.

"But one-off extremes like these don't necessarily lead to claims," Harrison said.

"A prolonged spell over five or seven days where the temperature hovers around freezing is when we get burst pipes, increased motor accidents and a subsequent spate of claims."

Ecclesiastical Insurance, Hiscox and four other insurers, are now using the freeze model in conjunction with ISL's flood, subsidence, windstorm and theft models to set risk levels by postcode.

Harrison said freeze claims were often overlooked by property underwriters.

"They worry about subsidence, flood and theft, but not wind and theft," he said.

"Freeze can be more subjective, but the claims can be expensive, around £15,000 or £20,000."

The top ten postcodes most likely to incur freeze damage

BD23 5 (Conistone, Yorkshire Dales)

CA9 3 (Alston near Penrith, Cumbria)

IV13 7 (nr Inverness, Scotland)

AB36 8 (Strathdon, Scotland)

NE47 9 (Allendale, near Consett)

HD7 6 (Marsden, Yorkshire)

SK23 0 (Chapel Milton,Peak District)

AB37 9 (nr Aberdeen, Scotland)

SK17 0 (Pilsbury, nr Buxton)

S36 4 (Stocksbridge, Peak District)