Storm Christoph has raged through England and Wales, adding further strain on the UK as it battles the ongoing coronavirus pandemic. Some insurance industry experts, however, have stepped in to offer support, advice and a solution
Insurer Zurich has warned that Storm Christoph could be a “double disaster” for communities in combination with the ongoing Covid-19 pandemic.
Currently, there are nearly 200 flood warnings in place across the UK, including 162 in England and 23 for Wales, while 2,000 homes have been evacuated in Didsbury, Manchester. Prime minister Boris Johnson deemed Storm Christoph a “danger to life”, with flood warnings set to remain in place for next week, according to Sky News.
Zurich is therefore calling on the government to overhaul the “broken” flood grant system in a bid to protect residents’ homes and mental health.
David Nichols, Zurich UK’s chief claims officer, said: “Widespread flooding at this time could be even more catastrophic for UK communities. With the country still in the grip of Covid-19, tens of thousands of people face the double disaster of flooding overlaid by the pandemic.
“If ever there was a moment to wake up to the mental, as well as the physical devastation caused by flooding, it is now.”
The insurer is offering free counselling to customers hit by the storms - existing policyholders will be entitled to five free sessions with a mental health expert.
Nichols continued: “The physical impact of extreme weather is impossible to ignore. But there is reason to be concerned about another ‘hidden’ consequence of the UK’s increasingly destructive weather – the harm it is doing to people’s mental health.
“For some victims, the psychological toll of flooding is just as devastating as the disaster itself .
“With five million people in England at risk of flooding and climate change intensifying the frequency and severity of extreme weather, a mental health crisis is looming.”
Referring to mental health as the “silent casualty of flooding”, it is important that it is not forgotten alongside the more immediate priorities, he added.
Meanwhile, Laura Hughes, manager for general insurance at the ABI, said: “Insurers expect flooding at any time and their top priority will be helping customers who have suffered flood and storm damage recover as quickly as possible.”
She advised those who have been affected by flooding to contact their insurer.
On 20 January, Flood Re gave oral evidence to the House of Lords Select Committee on flood risk assessment and planning; Hughes joined Flood Re chief executive Andy Bord in the virtual session.
Flood Re’s chief executive Andy Bord made three points:
1. Climate change is a real risk now: There needs to be a shift in the way climate change is discussed as it is happening right now, not at some point in the future. Climate change will mean increasing flood risk, especially surface water and flash flooding. Therefore, the government must place as much emphasis on adaptation as mitigation.
2. The government should support the introduction of Flood Performance Certificates (FPCs): The introduction of FPCs will be part of the solution to ensure there is a widespread and relatively rapid increase in the installation of property flood resilience (PFR) measures; these could be central to realising the government’s long-term objectives of creating a more resilient UK housing stock.
3. Flood Re continues to make home insurance available and affordable for those living at risk of flooding: 95% of homes at risk of flooding can now obtain 15 or more quotes for their home insurance and four out of five people with a prior flood claim have seen a saving of 50% or more on their home insurance. Importantly, Flood Re means that even if you are flooded, you will be able to obtain affordable home insurance in the future.
Speaking about the session, Bord said: “It was a valuable opportunity to discuss with leading experts what we believe needs to happen next.
“We need to ensure that we can tackle the growing threat of climate change, improve property flood resilience and reach a risk-reflective home insurance market by the time the [Flood Re] scheme ends in 2039.
“I hope that the Committee and the government find our recommendations both effective and practical – and I look forward to supporting in the implementation of these however we can.”
Mohammad Khan, general insurance leader at PricewaterhouseCoopers (PWC) UK, said the losses from Storm Christoph will not exceed last year’s Storm Ciara, however.
“It is still very early to say what the impact on the general insurance industry will be but based on the current weather, PWC estimates that the losses from Storm Christoph will be between £80m to £120m. This is clearly dependent on what future rainfall occurs but currently would be less than the losses that occurred from Storm Ciara last year,” he explained.
Meanwhile, Adam Rimmer co-founder of FloodFlash told Insurance Times: ”We never like to see clients disrupted, particularly during a period of huge financial stress from Covid closures.
”That said, it’s great to know our parametric insurance product pays clients in hours, even in a national lockdown. We have validated the first set of claims from Storm Christoph completely remotely thanks to our connected sensors. FloodFlash sensors are continuing to trigger across the country and more claims are coming this morning, but by lunchtime today we will already have paid £100,000s in claims.”
“Due to the existence of Flood Re, homeowners who have seen their properties flooded will not necessarily see an increase in the flood element of their premiums on renewal, following the recent storms and current weather. Flood Re charges a fixed premium for the flood element of home insurance for properties built in 2009 and prior,” Khan added.