Cost of floods revised upwards to £500m as storms continue

The anticipated cost from the January and December floods has been revised upwards from around £400m to £500m by PwC.

The accountancy firm said although there was a lot of rain in January, the damage to the UK was not nearly as bad as the damage caused by the weather in December.

Following a revision of the total cost estimates and taking into account the January weather, the firm now expects the industry will have to pay out up to £500m from the January and December storms. The economic damage will be £630m, which includes insured and non-insured losses.

The Met Office has issued severe warnings for the whole of this week. Heavy rain, gale-force winds and ice are all forecast for the next four days.

PwC insurance partner Mohammed Khan said given the weather forecasts for this week and further into February, they expect further flash flooding and for the estimated costs to rise.

Khan added: “It is too early to tell whether the weather will have an impact on insurer results for next year. Last year, the weather was very benign from January to October and insurers’ results from household and commercial property business were positive, even allowing for the December storms and floods.”