U.K. flood losses point to higher premiums.
Mark Bishop, a spokesman for Allianz, expects flood insurance rates to go up by about 10%. He noted the announcement by Norwich Union that it would increase its flood premiums by an average of 10% on household policies.
That figure is "in the ballpark," Bishop said. "Most informed observers would say that 10% is about right."
Allianz is unlikely to resist any upward trend in premiums, Bishop said. "We were planning to look at our premiums about this time anyway," he said. "These kinds of events only add more pressure on insurance companies."
Allianz does not have a major position in the U.K. flood market, Bishop said, but its losses were "bad enough."
Loss estimates of nearly 3 billion [pounds sterling] ($5.93 billion) come from the Association of British Insurers, which also reported that the floods generated almost 60,000 claims. Of these, the ABI said, 45,000 were domestic and 14,500 were commercial. The damage was caused by two flood events on June 25 and July 21.
Catastrophe modeler Risk Management Solutions has put the eventual payout at up to 3.25 billion [pounds sterling].
Aviva plc, the global insurer that operates in the United Kingdom through Norwich Union, incurred 235 million [pounds sterling] ($464 million) in flood claims. Royal & Sun Alliance Insurance Group plc has estimated its June flood losses at 55 million [pounds sterling] and its July losses at 65 million [pounds sterling]. RBS Insurance has put its flood losses at 125 million [pounds sterling].
Swiss Reinsurance Co. has estimated its losses at 100 million Swiss francs ($50.23 million), divided equally between the two storms.
Allianz Insurance plc expects to pay out about 60 million [pounds sterling] in U.K. flood claims, on both the commercial and personal sides.
The U.K. insurance industry is also likely to step up its pressure on the government to increase its spending on flood defenses.
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|Date:||Sep 1, 2007|
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