Climate crisis causes UK insurance claims to soar to 7-year high
2024-08-14
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[Global Times Special Correspondent Lin Xi] Affected by the climate crisis, the amount of compensation paid by British insurance companies hit a seven-year high. According to a report by the British "Guardian" on the 12th, industry data showed that in the second quarter of this year, the losses caused by extreme weather to households and businesses increased sharply, and the amount of claims related to weather impacts reached 144 million pounds. The total amount of compensation for various types of insurance increased by 5% month-on-month to 1.4 billion pounds.
The Association of British Insurers (ABI) said that weather-related claims have cost the insurance industry more than 100 million pounds for five consecutive quarters, as houses have been damaged by storms, heavy rains and frozen pipes. In the first half of this year, the UK experienced a lot of rainfall and bad weather. The Guardian previously reported that according to PwC estimates, Storm Henk caused nearly 150 million pounds in claims in the first week of this year alone. Clark, a policy adviser at the ABI, said the latest data showed that extreme weather in the UK could have a devastating impact on personal safety and their homes. She called on the government to focus on disaster prevention and recovery measures to reduce the UK's vulnerability to the climate crisis.
According to relevant data, in 2023, British insurance companies paid a record 573 million pounds related to weather impacts, 150 million pounds more than in 2022. In addition, the average compensation amount related to weather impacts in 2023 was close to 5,000 pounds per order, while it was only slightly more than 3,000 pounds the previous year. Based on the current trend, ABI predicts that the total amount of insurance claims of all types in 2024 is likely to exceed last year's 4.9 billion pounds (of which about 2.7 billion pounds have already been paid).
In this context, Clark said: "When the worst happens, home insurance plays a vital role in supporting customers." She also said that despite rising cost pressures, "insurance companies are still doing everything they can to provide customers with competitive insurance prices and high-quality consulting services during claims." However, a previous report on the website of the British insurance industry media "Insurance Business" stated that experts believe that continued extreme weather will increase the cost of buying insurance for the public. The frequent climate crises have caused insurance companies to increase the amount of compensation, and they have to increase product prices and pass the costs on to customers. The report also quoted experts as saying that the total amount of insurance compensation caused by natural disasters worldwide is currently about 100 billion US dollars per year, "of which 80% to 90% of the losses are weather-related."
It is reported that in recent years, the severity and frequency of extreme weather events around the world have continued to increase, weakening the resilience of the global economy. Last month, Hurricane Beryl swept across the Caribbean and hit the southern United States, causing billions of dollars in losses to communities and insurance companies. According to a recent report by NBC, the increase in natural disasters and climate change has forced home insurance providers to withdraw from high-risk areas to ensure company profitability.
(Source: Global Times)
