UK insurers put surge plans in place ahead of Storm Eunice hitting last week, but commentators agree that improved infrastructure resilience is the long-term answer as extreme weather events are on the up 

Insurers are bracing for claims after Storm Eunice battered the UK last week, with extremely strong winds and continued disruption laying siege to towns and cities from 18 February 2022. 

The UK’s Meteorological Office issued a rare red weather warning, which indicates a “significant danger to life,” for Storm Eunice on Friday, covering the south, south west and south east.

For example, RSA announced on Friday afternoon that it had a 237% increase in calls in the last hour due to Storm Eunice.

Anthony Doyle, property technical claims manager at Allianz Commercial, said: “Allianz Commercial has been contacting brokers in the areas predicted to be most affected by Storms Dudley and Eunice, encouraging them to share advice with customers.

The insurer “has also been posting practical tips on social media on how businesses can keep their employees safe and protect their premises”.

Doyle continued: ”Extremely strong winds [were] expected in England and Wales on Friday, with a red warning in the south west, so even things that seem simple can help keep your property safe - for example, bringing outdoor furniture and equipment inside. Allianz’s surge team is ready to assist customers.”

According to the Met Office, winds of more than 90mph were predicted in exposed coastal areas as a result of Storm Eunice, which made driving more dangerous. Further inland, an amber warning was issued, predicting winds of between 60mph and 80mph.

Eunice follows Storm Dudley, which hit the UK with 81mph winds around 16 February 2022. It triggered widespread power outages and travel disruption just before Storm Eunice.

Vulnerability of UK infrastructure

Simon Welton, Swiss Re’s market head for property and casualty in the UK and Ireland, said: “The two storms come just weeks after Malik and Corrie claimed multiple lives and footage of a pilot skimming the runway at Heathrow Airport sent shockwaves across the UK.”

ComparetheMarket last week named storms as the most common type of weather damage claim. The aggregator also flagged policyholders’ knowledge gap about the risk of local flooding. 

In 2020, Storm Dennis alone resulted in an economic loss of circa £475m, flooding across almost 1,500 properties and key infrastructure – including rail and road networks, town centres and business parks - as well as six fatalities, Welton added.

On 30 June 2020, prime minister Boris Johnson committed to accelerate infrastructure construction across the UK in a bid to “build back better, build back greener, build back faster”. This formed part of his ‘New Deal for Britain’ plan.

Welton said: “What exactly emerges from this plan is yet to be seen, but what is clear is that the infrastructure we build needs to be environmentally sustainable and resistant to the rising frequency and severity of natural hazards. This is vital if we’re going to increase our resilience to inevitable future events.”

He pointed out that the insurance industry has three distinct roles that could be critical in the move to ensuring a more sustainable infrastructure framework – as investors, de-riskers and users of big data.

As “investors”, the insurance industry can help by financing sustainable projects, while acting as “de-riskers,” the sector has a role in establishing a longer-term investment framework.

He added: “Insurers can facilitate new types of insurance offerings, standardising offerings and making cashflows more predictable and, in turn, the asset class more attractive to investors.”

Lastly, is the use of big data. Welton said: “The use of data can help to pinpoint where our infrastructure may be most vulnerable – therefore helping to prioritise where investment proceeds should be focused to improve durability as well as helping to avoid losses where issues are identified.

”This is particularly important in the UK as we continue to inhabit and build in coastal towns, where rising sea levels pose an imminent threat.”

Welton believes that by embracing these three roles, the insurance industry could move “from a world where insurance does not just finance the reconstruction after the loss, but more importantly finances activities to prevent the loss”.

Surge plans in place

Insurers, meanwhile, battened down the hatches in preparation for the short-term ramifications of Storm Eunice.

Claire Varney, claims relationship executive at insurer Zurich UK, said: “We’re closely monitoring the two back-to-back storms and have put our surge plans in place to deal with any influx in claims.

“The winter storm season has already hit the UK hard, with storm Arwen [being] one of the most destructive storms of recent years.

”With Storm Dudley, followed by Eunice, forecasted to bring dangerously high winds, it’s vital that everyone takes steps to protect their property.”

The insurer highlighted that increased sales of garden equipment during lockdown could cause a spike in storm-related property damage claims - it urged households to secure patio tables, chairs and trampolines.

Varney continued: “We could see an increase in damage caused by flying garden furniture after sales of outdoor equipment soared during the pandemic. Households invested in sheds, trampolines, patio tables and chairs as families spent more time socialising outdoors. Garden furniture and storm-tossed trampolines can cause damage to windows and fences, while shed roofs are vulnerable to being torn off.

“Strong winds also wreak havoc with cars, which are vulnerable to falling branches, tiles and other debris. Those who can should park their car in a garage or away from trees.”

Direct Line’s response lead, David Geddes said: “Following the impact of Storm Eunice, which continues to batter the UK, and Storm Dudley earlier this week, there are a few simple steps householders can take to protect both themselves and their homes from the ongoing weather disturbances.

“Householders should keep up to date with local weather warnings and make sure any loose items, that could potentially become dangerous projectiles in storm conditions, are stored away. Taking simple steps like securing loose items can help keep disruption and damage to a minimum.”

Rural insurer, NFU Mutual highlighted that the Isle of Wight was hit hard during storm Eunice. The insurer’s agent, John Heather, with offices in the Isle of Wight, Bournemouth and the New Forest, said: “All the schools are shut, postmen are not working today on the island, we are receiving reports of trees coming down across the Island and roads are closed. The power is going out in some of the more rural locations.

“We’ve already had customers calling about damage caused by trees coming down. One has had a tree come through her roof, another has had a tree destroy her conservatory.”

The insurer is bracing for a surge of calls in the coming hours while giving priority to vulnerable custmers, after having reports of roof damage to both houses and cars including falling debris landing on vehicles. 

Mark Constable, agent at NFU Mutual’s South Cotswolds Agency, added: ”The smoking shelter at a local pub has taken off and damaged nearby property. Some walls have also collapsed, including one onto a road. Several trees have fallen, again causing road blockages.”

However, Constable said that despite the claims expected, the insurer wanted to reassure customers that its is prepared and has activated its emergency plan. 

Why people buy insurance

Likewise, Allianz Holdings’ chief executive Colm Holmes told Insurance Times that the insurer is ”very much prepared” for claims caused by Storm Eunice - it moved ”a few hundred of our non-claims staff in to assist the claims operation” over the weekend, ”ready to take calls from customers”.

Allianz was also in contact with the majority of its customers ahead of Storm Eunice, advising on the potential damage fallout. It additionally had roofers and other contractors on standby in order to deal with claims immediately.

Holmes continued: “This reminds us all – this is why people buy insurance, for these events. This is our moment of truth where we can clearly demonstrate to our customers that we’re going to be there for them and we’re going to be there quickly after this happens. 

”We’re absolutely ready and we’ve got staff, and additional support, on standby, ready to go immediately once the storm passes.”

Varney added: “These storms are a reminder of the increased frequency and intensity of extreme weather events in the UK. As our climate changes, we must all do more to prepare and adapt.”

Zurich is already responding to the challenge of increasing extreme weather events by finding new ways to support its customers. This includes recently launching a build back better scheme to help flood-hit homeowners improve their property resilience ahead of future flooding. It has also introduced a free counselling service for people impacted by weather-related events.

Welton added: “The effects of climate change will only drive more extreme weather events like this in the years to come, so this is yet another reminder of why we urgently need to strengthen resilience across the country.”