More big names set to join RSA in facing huge cold-weather losses
Ageas, Aviva, Zurich and AXA are all set to follow RSA in suffering losses that are likely to cost the industry more than £500m in household claims.
RSA last week announced in a profit warning that weather-related claims were £142m above normal levels following the coldest December on record.
AXA managing director of intermediary and partner sales Mike Keating said that he expected the industry losses to be “north of £500m” and that household rates across the industry needed to go up by a minimum of 10%.
Keating added that most reinsurance arrangements would not kick in because the freeze happened over a number of days, and could not be classified as a single event.
He said: “There’s a dire need for these mini-events to be priced into the contracts because, with no reinsurance protection, they will disturb profits.
“The crystal ball does not suggest these events are going to happen once in every 10 or 20 years – they are happening every single year.”
RSA’s claims experience showed 18% coming from Yorkshire, 17% from north-west England, 11% from Northern Ireland and 10% each from the east Midlands and Scotland. Analysts suggested that Aviva’s losses would be of a similar size to RSA’s, but also that Zurich could have big UK exposure.
Broker Network chairman Grant Ellis, whose members have been dealing with the weather-related claims, said: “It’s been different this year because it has been frost related. We’ve been getting better at making sure we cover frost-related damage. The depth of the frost has been the biggest factor, and they’re all going to get caught.”
An Aviva spokesman said it was too early to talk about volumes, but the weather had caused claims in burst pipes, damage caused by weight of snow, and minor motor accidents. Ageas and Zurich declined to comment.